Earlier, The Jones Group reported a slight 2 percent increase in consolidated sales to $1,044 million for its third quarter, which ended on Oct. 1, in spite of its multiple recent acquisitions including most recently Kurt Geiger from the U.K. The group's jeans business was particularly weak, and there are reports that Jones may want to sell it out to concentrate of shoes and other products.
Operating profit remained essentially flat at $604 million, while net income rose to $41.2 million from $29.2 million. Adjusted net earnings per shares declined slight. They benefited from the favorable impact of a change in tax law in the U.K, offset by a foreign currency loss of about $6 million. Charges related to its previous investments in Stuart Weitzman and Robert Rodriguez went down as compared to one year ago.
The diversified American company, whose properties include the Nine West and Easy Spirit chains of shoe shops, said the results were in line with its expectations, considering the promotional retail environment in the U.S., but investors punished Jones by lowering its quotation on the stock exchange. The management noted that the group's financial position at the end of the quarter remained strong, in spite of its recent acquisitions.
The group's revenues from footwear and accessories in the U.S. reached $264.3 million in the quarter, up from $261.3 million in the year-ago period, and they generated an operating margin of 10.5 percent versus breakeven results a year earlier. Its wholesale business outside the U.S. grew to $99.6 million from $86.3 million, but the operating margin on these operations went down to 11.1 percent from 13.3 percent in the same period a year ago.
At retail, The Jones Group's sales went down in the U.S. to $150.1 millio from $159.6 million in the same period a year ago, and their operating margin remained negative at 10.8 percent, up from a negative margin of 8.1 percent. International retail revenues increased sharply to $85.3 million from $12.5 million, thanks to the acquisition of Kurt Geiger, but the operating profit margin fell to 0.7 percent from 10.2 percent.