J.Crew swings to Q4 net loss of 74.4 million dollars

J.Crew Group, Inc. said that gross margin for the fourth quarter decreased to 22.4 percent from 36.7 percent in the fourth quarter last year. Operating loss, the company said, was 64.2 million dollars compared with an operating income of 4.9 million dollars in the fourth quarter last year and net loss for was 74.4 million dollars compared with net income of 34.7 million dollars in the fourth quarter last year. Adjusted EBITDA loss was 31.9 million dollars compared with 63.4 million dollars in the fourth quarter last year.

Commenting on the trading results, Michael J. Nicholson, J.Crew’s President and Chief Operating Officer and member of the Office of the CEO, said in a statement: "The J.Crew brand delivered disappointing results in 2018 as many new strategies we deployed were ultimately not successful and negatively impacted our financial performance, while Madewell generated another year of record results, accelerating its path to becoming a 1 billion dollars global brand. Despite continued strong performance at Madewell, we believe our 2018 results do not reflect the opportunity inherent in the collective strength of our iconic brands."

Overview of J.Crew’s Q4 and full year results

Total fourth quarter revenue increase of 3 percent to 733.8 million dollars, while the company said, comparable sales increased 9 percent following a decrease of 3 percent in the fourth quarter last year. J.Crew brand sales decreased 4 percent to 527.9 million dollars, while J.Crew comparable sales increased 6 percent following a 7 percent decrease in the fourth quarter last year. Madewell sales increased 16 percent to 157.9 million dollars, while Madewell comparable sales increased 22 percent following an increase of 19 percent in the fourth quarter last year.

For fiscal 2018, the company added, total revenues increased 5 percent to 2,484 million dollars, while comparable company sales increased 6 percent following a decrease of 6 percent last year. J.Crew brand sales decreased 4 percent to 1,779.5 million dollars, while J.Crew comparable sales increased 2 percent following a decrease of 10 percent last year. Madewell sales increased 26 percent to 529.2 million dollars, while Madewell comparable sales increased 25 percent following an increase of 14 percent last year.

Full year gross margin decreased to 33.6 percent from 37.8 percent last year. Operating income was 0.9 million dollars compared with an operating loss of 116.2 million dollars last year. Net loss for the year was 120.1 million dollars compared to 123.2 million dollars last year. Adjusted EBITDA was 112.8 million dollars compared to 225.9 million dollars last year.