J. Crew continues to cruise reporting a 12.2% revenue growth to $627.2 million while the team readies for their fashion presentation this Tuesday. For Q2, store sales rose 11.1 percent to $443.5 million and direct sales are up 14.4 million to $173.6 million with overall comparable sales up 4 % versus a 1 percent decline in the 2013 period.
Direct sales are growing faster than in-store sales — 14 percent ($173.6 million for the second quarter) and 11 percent ($443.5 million), respectively.
Sales weren’t the only aspect up however as J. Crew finished the quarter with inventories of $394.7 million, 22.9 percent higher than the year-ago level of $321.2 million.
Despite all the positives, J. Crew Group Inc.’s second-quarter profits fell as the retailer resorted to promotions to reduce high inventories. In the three months ended Aug. 2, net income dropped 38.2 percent to $10.8 million from $17.5 million in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization fell 18.6 percent to $67.6 million from $83 million.
The Madewell division, currently at 76 store, will expand by 20 stores this year. “We feel good about the way Madewell’s performing,” said Stuart Haselden, Chief Financial Officer, in the quarterly call. Adding: “The environment continues to be challenging, traffic continues to be a headwind.”