There is an interesting article over at Forbes (click here) that describes J.Crew's current financial status.
J.Crew shares rise on analyst upgrade
By Associated Press
January 23, 3008
Shares of J.Crew Group Inc. rose on Friday, as an analyst said the company is making progress with inventory and expense reductions and upgraded the company to "Equal weight" from "Underweight." Shares rose 30 cents, or 2.9 percent, to end at $10.56.
Earlier this month, J.Crew Group (nyse: JCG) Inc. said that weaker-than-anticipated sales would lead the apparel retailer to report a fourth-quarter loss. The New York company said sales were hurt by an aggressive effort to clear fall and holiday inventory during the fourth quarter.
"Sales remain under considerable pressure, but we think inventory and expense reductions move the risk/reward back to neutral ground," said Barclays Capital analyst Jeff Black.
He raised his estimate for the year ending in January 2010 to 57 cents per share from 40 cents per share - while analysts polled by Thomson Reuters, on average, predict a profit of 58 cents per share.
"Heavier clearance and a January sample sale should help J.Crew bring inventory in-line with sales by the third quarter, though we expect weak margins across the first half of 2009," he said. "All in all, we believe management is doing the right things, the long-term square footage opportunity is attractive and our 2009 estimate is no longer an outlier."
First, I am thrilled about the positive news. Although, I am cautiously optimistic about it considering these economic times. Second, I find it interesting that the Sample Sale was mentioned in helping J.Crew with their inventory levels. When I attended the event, I saw lots of people but they were *not* purchasing lots of merchandise. Now that the sale has ended, I am curious how "well" it did. ;)
What are your thoughts on the article? Do you think the positive direction described will continue for the rest of 2009? Would you consider buying J.Crew stock right now? ;)