J Crew posts profit rise despite falling sales

J Crew

J Crew has seen revenues edge up over its first quarter as falling sales within its core brand were offset by its smaller Madewell fascia.

In the three months to February 3, group revenues grew two per cent to $710.6 million (£501 million).

Despite the overall revenue growth, like-for-like sales dropped seven per cent following a five per cent drop in the prior quarter.

Sales across J Crew’s eponymous brand also dropped four per cent to $547.1 million (£386.3 million), while like for likes dropped seven per cent.

This was largely offset by strong sales at its smaller stablemate Madewell, which enjoyed a revenue rise of 32 per cent to $135.8 million (£95.9 million) and a like-for-like sales rise of 17 per cent.

Gross profits rose from 34.7 per cent to 36.6 per cent while adjusted EBITDA jumped 25 per cent to $64.6 million (£45.6 million) year-on-year.

Falling sales at its core brand did not phase chief executive Jim Brett who said: “While we are only at the very beginning of our evolution of the J Crew brand, meaningful change is happening and we are already seeing results in our most important business — women’s apparel — signalling that our strategy is working.

“With the right strategy and leadership in place, we are uniquely prepared to respond to the growing customer preference for a more personalised experience.

“We will scale Madewell more rapidly, building upon its proven and consistent record of growth, through strategic investments with highly profitable returns.

“We are a house of American brands, J Crew our most iconic, all with significant opportunity to expand and enhance our product range while engaging our customers in more meaningful ways.”

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