(Reuters) - Jones Group Inc JNY.N, the maker of clothes and shoes under such brands as Nine West, Jones New York and Anne Klein, expects to build on efforts to improve gross margins that lifted its quarterly profit above Wall Street expectations.
Jones has been shutting underperforming stores, including 29 in the quarter, getting rid of slow moving inventory and introducing products to cash in on the latest fashion trends.
The company expects gross margins to increase by 70 basis points or more for the full year as it continues to adjust inventory levels and close stores, a company executive said on a conference call with analysts.
Inventory was down 11 percent at $468 million at the end of second quarter.
Most of the company’s second-quarter gross margins increase of 1.80 percentage points was driven by its acquisition of upscale British brand Kurt Geiger last year.
Net income for the second quarter rose to $8.1 million, or 10 cents per share, from $5.2 million, or 6 cents per share, a year earlier.
Excluding items, the company earned 22 cents per share for the quarter ended June 30. However, revenue in the period fell 4 percent to $854.8 million.
Analysts had expected the company to earn 7 cents per share, on revenue of $867.1 million, according to Thomson Reuters I/B/E/S.
Jones shares were up 5 percent at $10.09 on Wednesday morning on the New York Stock Exchange. They earlier touched a high of $10.35. (Reporting by Arpita Mukherjee in Bangalore; editing by Anthony Kurian and Viraj Nair)