J. Crew Q1 revenues of $345.8 mn

USA -- J. Crew Group Inc announced financial results for the three months ended May 2, 2009 (first quarter fiscal 2009).

First quarter highlights:
a€¡é Revenues increased 2% to $345.8 million. Store sales (Retail and Factory) increased 5% to $240.7 million, with comparable store sales decreasing 5%. Comparable store sales increased 2% in the first quarter of fiscal 2008. Direct sales (Internet and Phone) decreased 6% to $95.4 million. Direct sales increased 17% to $100.9 million in the first quarter of fiscal 2008.
a€¡é Gross margin decreased to 42.2% of revenues from 46.9% of revenues in the first quarter of fiscal 2008. The decrease in gross margin is primarily related to increased markdowns as a result of beginning of quarter inventory levels.
a€¡é Operating income decreased 34% to $35.3 million, or 10.2% of revenues, compared to $53.0 million, or 15.6% of revenues, in the first quarter of fiscal 2008. Operating income in the first quarter of fiscal 2009 includes a charge of $1.3 million for severance and related costs associated with our workforce reduction announced in February 2009 and non-cash asset impairment charges of $1.0 million related to underperforming stores.
a€¡é Net income was $20.4 million, or $0.32 per diluted share and includes the impact of severance and asset impairment charges of approximately $0.02. Net income was $30.5 million, or $0.48 per diluted share, in the first quarter of fiscal 2008.

Millard Drexler, J. Crew's Chairman and CEO stated: "We are relatively pleased with our first quarter results and while earnings were lower than last year, we did experience an improved trend in our business. We think it is clear that there is no choice in this environment than to continue to be creative and figure out where the customer is going, not to respond to where he or she has been."

Balance Sheet highlights as of May 2, 2009:
a€¡é Cash and cash equivalents were $154.6 million at the end of the first quarter compared to $121.5 million at the end of the first quarter in the prior year.

a€¡é Inventories at the end of the quarter were $193.9 million, reflecting the impact of 43 net stores opened since the first quarter of fiscal 2008. Inventory per square foot was flat to last year at the end of the first quarter of fiscal 2008.

Guidance
The Company currently expects second quarter fiscal 2009 diluted earnings per share in the range of $0.08 to $0.12.
 
J. Crew Group Inc