Apparel maker Jones Apparel Group Inc. (JNY) is likely to release its fourth quarter results Wednesday, February 11, with a conference call scheduled for 8:30 am.
On average, analysts polled by Thomson Reuters expect the company to incur a loss of $0.05 per share on revenues of $826.82 million. Analysts' estimates typically exclude special items. The consensus range is $0.06 -$0.01 for loss per share, and $810.90 million - $839.50 million in revenues.
Last month, the New York-based wholesaler of apparel said it expects a Q4 loss from continuing operations in the range of $10.11 - $10.07 per share. Adjusted loss per share from continuing operations is expected to range between $0.03 and $0.06. In the prior-year quarter, company reported a loss from continuing operations of $1.01 per share.
Jones Apparel expects the quarterly results to encompass a pre-tax, non-cash charge of about $815 million or $795 million after-tax related to its wholesale Footwear and Accessories business. Charges related to trademarks utilized in Footwear and Accessories business amounting to $25 million would also be recorded in the quarterly results, the company said.
For fiscal year 2008, the company expects loss from continuing operations in a range of $9.23 - $9.27 per share, compared to earnings of $0.45 per share for the full year 2007.
Forecast for full-year adjusted earnings from continuing operations was lowered to a range of $0.85 - $0.88 per share from prior outlook of $0.93 - $0.98 per share. Wall Street analysts have a consensus earnings estimate of $0.86 per share on revenues of $3.60 billion for 2008.
Wesley Card president and CEO of Jones Apparel stated, "While our previous guidance considered the difficult retail environment prevailing at that time, conditions significantly worsened as the quarter ended." The company's fourth quarter results were impacted by the promotional activities at its own retail operations and at its retail partners.
For the third quarter, the retail value chain operator Jones reported a sharp decline in its profit, hurt by week sales and exit from certain sportswear lines. Net income for the quarter fell to $27.3 million or $0.33 per share from $400.1 million or $3.97 per share last year. Quarterly revenues declined to $965 million from $1.03 billion in the prior year quarter.
Like many other apparel manufacturers, Jones Apparel also announced cost reduction actions, including job cuts, intended to save around $33 million annually, to weather the exacerbating economic downtrend. The management has also decided to reduce its quarterly cash dividend to $0.05 per share from $0.14 per share, in a bid to enhance its financial flexibility.
Among Jones' rivals, Brown Shoe Co. Inc. (BWS) recently updated its capital containment initiatives, which included workforce reduction, changes in compensation structure and rationalization of operating expenses to yield annual savings in the range of $28 million to $31 million.
Brown Shoe, which has 13,100 full-time employees, expects the job cut program to impact 12% - 14% of its domestic workforce in business areas across the enterprise, excluding stores and distribution centers. The company also announced its preliminary consolidated net sales of $521 million for the fourth quarter.
Another peer, Liz Claiborne Inc. (LIZ) also implemented additional cost reduction initiatives that include 725 job cuts or 8% of its U.S. workforce, in an effort to pull itself out of the volatile economic environment.
Liz Claiborne on January 13, revised down its fourth quarter earnings outlook, citing a challenging operating environment and highly promotional retail environment. The company said its currently expects adjusted results from continuing operations to be in the range of breakeven - loss $0.15 per share, compared to the previous earnings guidance of $0.19 - $0.24 per share.
Yet another competitor, AnnTaylor Stores Corp. (ANN) on November 21, withdrew its fourth quarter and full year earnings guidance, citing the current volatility and uncertainty.
Jones Apparel closed Tuesday's trading session at $3.26, on a volume of 1.86 million shares. For the past 52 weeks, the stock has been trading between $2.34 and $22.12.
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