J Crew posted a second-quarter profit of 32 cents per share last night, which came in 3 cents ahead of analysts expectations. The apparel retailer reported revenue of $304.7 million, which fell short of analysts revenue expectations of $308.5 million for the second quarter.
The company's third quarter earnings guidance was for 35 to 37 cents per share. Analysts had been projecting 37 cents per shares, so this also was perceived as a bit of a disappointment. The full year earnings view from J. Crew is now for $1.42 to $1.46. Wall Street has been expecting $1.46 per share from the retailer for the year. The street is obviously not too pleased with the results from J. Crew Group Inc (NYSE:JCG) as the stock i
s currently trading down 9.66% on the day.
The margin picture at JCG is actually looking quite strong. Gross margins rose to 43.7%, up from 42.1% a year ago. JCG has some of the strongest margins among its peers, which bodes well for the company if it can keep up the margin expansion.
J. Crew has been a stronger stock than most of the apparel retailers of late, so it isn't too surprising to see the stock hit hard on a small earnings miss. The company trades at a PEG ratio of 1.46, versus an industry average of 1.27 so the stock still isn't particularly cheap.
J. Crew is a retailer that has a strong balance sheet and should be back in the future. I certainly wouldn't run out to buy the shares now, because retailers will be the first to get hurt in an economic downturn. I would keep an eye on this stock and see if the slower revenue growth is a trend or just a blip. Somewhere down the road this stock may be a good buy again, but now isn't the time.
» August same store sales retail report card from GrowYourFunds
August same store sales results were out today, and for the most part the news was good. There were several notable upside surprises, which resulted in the stocks getting a nice pop today, but there were also some losers in... [Read More]
Tracked on: September 6, 2007 7:37 PM | Permalink to Trackback