Madewell increases sales, J. Crew core business climbs in Q2

By

Obi Anyanwu

Published
Sep 1, 2016

J. Crew on Wednesday released its second quarter and first half 2016 results. The company remains focused on improving its core business while its Madewell brand continues to offset the total company revenue.

 
Revenue for the second quarter decreased 4% to $569.8 million, and comparable company sales decreased 8% following a decrease of 11% in the second quarter of last year. J. Crew sales also decreased 6% to $476.7 million and J. Crew comparable sales decreased 9% after decreasing 13% in the prior second quarter.
 
Chairman and CEO Millard Drexler said that he was very pleased with the increased focus on the core business. He said, “Looking ahead, we are focused on driving sales productivity with exciting new merchandising and marketing initiatives that are expected to enhance customer loyalty and extend our brand reach. We have several key operational initiatives underway that we believe position us to optimize our global sourcing and supply chain and we will continue to review all aspects of our business to drive further efficiencies."

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The company announced in August that the J. Crew brand will launch at 16 Nordstrom locations and the Nordstrom website on September 12, much like its sister brand Madewell that launched at 15 locations in 2015. The Madewell business continues to thrive and its partnership with Nordstrom expanded to a total of 76 stores and the Nordstrom website.
 
Madewell second quarter sales increased 15% to $78.3 million, and its comparable sales increased 3% following an increase of 8% in the prior second quarter.
 
J. Crew also managed to expand its gross margin in the second quarter to 35.7% from 34.3% in the previous second quarter, and reduce its net loss to $8.6 million from $13.6 million. Adjusted EBITDA was $38.3 million compared to $41.0 million.
 
For the first half of 2016, total revenue decreased 3% to $1,137.3 million, comparable company sales decreased 7%, J. Crew sales decreased 6% to $957.5 million and Madewell sales increased 16% to $150.7 million. Net loss was $16.7 million compared to $476.0 million in the prior comparable period and adjusted EBITDA was $83.7 million compared to $85.8 million.