J. Crew continues to miss the mark with consumers, while sister brand Madewell has found a retail sweet spot with trendy, young shoppers.

Third Quarter highlights:

• Total revenues decreased 5% to $566.7 million. Comparable company sales decreased 9% following a decrease of 8% in the third quarter last year.


• J.Crew sales decreased 12% to $430.4 million. J.Crew comparable sales decreased 12% following a decrease of 9% in the third quarter last year.


• Madewell sales increased 22% to $107.5 million. Madewell comparable sales increased 13% following an increase of 4% in the third quarter last year.


• Gross margin increased to 40.1% from 38.1% in the third quarter last year.


• Operating income was $24.7 million compared to $20.0 million in the third quarter last year. The third quarter this year includes transformation costs of $12.4 million and transaction costs of $1.0 million.


• Net loss was $17.6 million compared to $7.9 million in the third quarter last year. The third quarter this year includes the impact of transformation and transaction costs.

 

First nine months highlights:

• Total revenues decreased 4% to $1,659.5 million. Comparable company sales decreased 8% following a decrease of 7% in the first nine months last year.


• J.Crew sales decreased 10% to $1,302.0 million. J.Crew comparable sales decreased 11% following a decrease of 9% in the first nine months last year.


• Madewell sales increased 20% to $285.2 million. Madewell comparable sales increased 11% following an increase of 4% in the first nine months last year.
• Gross margin increased to 38.1% from 36.6% in the first nine months last year.


• Operating loss was $126.1 million compared with operating income of $34.0 million in the first nine months last year. The operating loss includes (i) non-cash impairment charges of $136.9 million, (ii) transformation costs of $32.0 million, (iii) transaction costs of $17.2 million, and (iv) severance costs of $10.5 million. Operating income last year includes non-cash impairment charges of $6.7 million.


• Net loss was $161.6 million compared to $24.6 million in the first nine months last year. The net loss this year reflects the impact of non-cash impairment charges, transformation costs, transaction costs, and severance costs. The net loss last year reflects the impact of non-cash impairment charges.