J.Crew reports loss on 'disappointing' 2018
J.Crew Group on Wednesday reported a net loss of $120.1 million for the fiscal year ended February 2, 2019, as its namesake J.Crew brand continued to underperform in 2018.
"The J.Crew brand delivered disappointing results in 2018 as many new strategies we deployed were ultimately not successful and negatively impacted our financial performance, while Madewell generated another year of record results, accelerating its path to becoming a $1 billion global brand,” said Michael J. Nicholson, President and Chief Operating Officer.
Total revenues for the year increased 5 percent to $2.48 billion, while comparable company sales increased 6 percent following a decrease of 6 percent last year.
By brand, J.Crew sales decreased 4 percent to $1.78 billion and its comparable sales increased 2 percent, following a decrease of 10 percent last year.
As in prior earnings reports, it was the company’s darling brand Madewell that helped pull the company out of distress, with a yearly sales increase of 26 percent reaching $529.2 million. Likewise, comparable sales increased 25 percent following an increase of 14 percent last year.
Operating income was $0.9 million compared with an operating loss of $116.2 million last year.
The disappointing full-year result followed a lacklustre fourth-quarter in 2018. The company registered a loss in its fourth quarter of $74.4 million compared with net income of $34.7 million in the fourth quarter last year.
Total revenues during the quarter increased 3 percent to $733.8 million, while comparable company sales increased 9 percent, following a decrease of 3 percent in the fourth quarter last year.
Its namesake brand J.Crew saw sales decrease 4 percent to $527.9 million, while comparable sales increased 6 percent.
During the quarter, Madewell sales increased 16 percent to $157.9 million and comparable sales increased 22 percent.
"Despite continued strong performance at Madewell, we believe our 2018 results do not reflect the opportunity inherent in the collective strength of our iconic brands," said Nicholson.
"Accordingly, we have taken immediate and decisive action to refocus our strategy and improve performance in 2019 with the goal of returning J.Crew to profitability and sustaining momentum at Madewell. Finally, we remain highly focused on managing inventory with increased discipline while aggressively optimizing expenses."
Most recently in February, Chris Benz was named chief designer for the J. Crew brand.
The company is still working to replace CEO Jim Brett who abruptly left the company in November.
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