KFDA - NewsChannel 10 / Amarillo, TX: newschannel10.comJones Apparel posts 3Q profit, despite weak sales

Jones Apparel posts 3Q profit, despite weak sales

NEW YORK (AP) - Jones Apparel Group Inc. on Wednesday posted a sharply higher-than-expected profit despite a drop in sales as the retailer cut costs and tightened inventories.

The company, whose brands include Jones New York, Nine West and Anne Klein, said for the period ended Oct. 3 earnings rose to $29 .1 million, or 36 cents per share, from $26.8 million, or 33 cents per share, last year.

Excluding severance and restructuring costs, it earned 46 cents per share. Analysts surveyed by Thomson Reuters, on average, predicted a profit of 27 cents per share.

Jones continued to experience weakness in sales. The company said its revenue fell 11 percent, to $855.7 million from $964.7 million last year. Analysts thought sales would be higher, at $867 million.

Wesley R. Card, Jones CEO, said in a statement, "We are cautiously optimistic that the holiday season will generate better financial results across the industry." The company did not provide specific updated guidance for its operations.

Jones, like many of its rivals, including Liz Claiborne Inc. and VF Corp., has struggled as major stores have cut back on inventory to better match supply with demand because consumers are spending less on discretionary items. The company has cut jobs and costs in an effort to improve performance.

So far the company has closed 69 stores and remains on track to exit about 265 locations in 2009 and 2010. Jones Apparel expects closing stores will save $4 million in 2009, $16 million in 2010 and $22 million in 2011, about $1 million more in both 2010 and 2011 than the company previously estimated.

Shares of Jones Apparel gained 19 cents to $17.88 in morning trading.

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