Jones Apparel Group, Inc. today reported results for the fourth quarter and full year 2004. Revenues increased to $1,082.9 million for the fourth quarter ended December 31, 2004 from $980.1 million for the fourth quarter of 2003. Revenues for the full year 2004 increased to $4,649.7 million from $4,375.3 million for the full year 2003. Earnings per share were $0.28 for the fourth quarter of 2004 as compared to $0.33 for the fourth quarter of 2003. Earnings per share were $2.39 for the full year 2004, as compared to $2.48 for the full year 2003.
Peter Boneparth, President and Chief Executive Officer, stated, “As we discussed on January 16th, the fourth quarter was more challenging than we had anticipated. Higher levels of promotional activity were utilized to stimulate consumer purchasing, pressuring gross margins and the level of our profitability in the period. The promotional activity was not isolated to any one of our business segments, though it was more prevalent in our wholesale better apparel and wholesale footwear and accessories businesses. Comparable sales in our owned retail stores, excluding Barneys, were down 4.4% in the period, which also impacted our overall performance.”
Wesley R. Card, Chief Operating and Financial Officer, commented, “Our inventory levels at December 31, 2004 were $664.2 million, compared to $590.6 million at December 31, 2003. On a comparable basis, excluding inventory added as a result of the acquisitions of Maxwell and Barneys, inventory at year-end totaled $573.1 million, a 3.0% decrease compared with the year earlier period. Our accounts receivable were $448.3 million at year-end versus $385.8 million in the prior year period. Excluding acquisitions, accounts receivable increased 1% to $389.1 million. We ended 2004 with full year operating cash flow of $461.9 million and a debt to total capitalization ratio of 31.5%, each in line with our previous guidance. We ended the year with $69.2 million of short-term borrowings and $367.8 million of outstanding letters of credit against our $1.5 billion committed bank lines, allowing us significant financial flexibility. During the quarter, we repurchased common stock totaling $31.8 million resulting in a 2004 full year common stock repurchase of $194.9 million. As of December 31, 2004, $141.4 million remains available for repurchase and is authorized by the Company's Board of Directors.”
Mr. Card continued, “Turning to 2005, we forecast total revenues to be in a range of $5.3 billion to $5.35 billion with an operating profit margin in a range of 11.4% to 12.0%. We are reiterating our range of projected earnings per share from $2.75 to $2.90, an increase of 15% to 21% over 2004 earnings per share of $2.39. As we previously stated, this forecast reflects our continued cautious outlook and includes the projected results of Barneys New York, along with the incremental interest expense associated with the $750 million senior note financing completed November 22, 2004. We anticipate 2005 full year operating cash flow to be in a range of $450 million to $475 million.”
Mr. Boneparth concluded, “While the business climate during the second half of 2004 was considerably more challenging than the first half, we enter 2005 cautiously optimistic that the overall retail environment will improve. Moreover, we continue to believe that the combination of our diversified and balanced branded portfolio, and our strong cash flow and financial flexibility, properly position us to successfully execute our business strategy.”
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.10 per share to all common stockholders of record as of March 2, 2005 for payment on March 11, 2005.
The Company will host a conference call with management to further review this press release at 8:30 am eastern time today and is accessible by dialing 412-858-4600 or through a web cast at http://www.jny.com. The call will be recorded and made available through February 24, and is accessible by dialing 877-344-7529. Enter account number 237 and conference number 364219.
Jones Apparel Group, Inc. (http://www.jny.com), a Fortune 500 company, is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. We also market directly to consumers through our chain of specialty retail and value-based stores, and operate the Barneys chain of luxury stores. Our nationally recognized brands include Jones New York, Evan- Picone, Norton McNaughton, Gloria Vanderbilt, Erika, l.e.i., Energie, Nine West, Easy Spirit, Enzo Angiolini, Bandolino, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Kasper, Anne Klein, Albert Nipon, Le Suit and Barneys New York. The Company also markets apparel under the Polo Jeans Company brand licensed from Polo Ralph Lauren Corporation and costume jewelry under the Tommy Hilfiger brand licensed from Tommy Hilfiger Licensing, Inc. and the Givenchy brand licensed from Givenchy Corporation and footwear under the Dockers Women brand licensed from Levi Strauss & Co. Each brand is differentiated by its own distinctive styling, pricing strategy, distribution channel and target consumer. We primarily contract for the manufacture of our products through a worldwide network of quality manufacturers. We have capitalized on our nationally known brand names by entering into various licenses for several of our trademarks, including Jones New York, Evan-Picone, Anne Klein New York, Nine West, Gloria Vanderbilt and l.e.i., with select manufacturers of women's and men's products which we do not manufacture. For more than 30 years, we have built a reputation for excellence in product quality and value, and in operational execution.
Certain statements herein are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements represent the Company's expectations or beliefs concerning future events that involve risks and uncertainties, including the strength of the economy and the overall level of consumer spending, the performance of the Company's products within the prevailing retail environment, and other factors which are set forth in the Company's 2003 Form 10-K and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.