J. Crew Sinks After Clothing Retailer Reduces Annual Earnings Forecast
J. Crew Group Inc. Chief Executive Officer Mickey Drexler is already focused on next year after watching shoppers slow their spending in the last month and cutting the apparel purveyor’s 2010 profit forecast.
“It was hot and then it got colder,” Drexler said yesterday in a call with analysts. “People aren’t out there the way they were. We’re looking at spring 2011 and moving forward.” The shares fell the most in more than a year.
Profit will be $2.25 to $2.35 a share, the New York-based company said yesterday in a statement after markets closed. That compared with a forecast in May of as much as $2.45. The retailer expects third-quarter earnings of as much as 60 cents a share, which falls short of analysts’ projections. Sales at stores open at least a year will be flat in the quarter.
J. Crew is the latest U.S. retailer to say it’s unsure about the rest of the year. Last month, store sales missed analysts’ estimates as consumers restricted spending ahead of the back-to-school season. Consumer confidence also slumped in July, according to a University of Michigan survey.
J. Crew, which operates only in the U.S., fell $2.39, or 7.2 percent, to $31.04 at 4:02 p.m. in New York Stock Exchange trading. The drop was the biggest since June 2009.
Net income in the second quarter ended July 31 rose to $34.9 million, or 53 cents a share, from $18.6 million, or 29 cents, a year earlier.