Jones Apparel Group Q3 Profit Jumps on Cost Cuts (JNY)

Created by Dividend.com

Apparel maker and retailer Jones Apparel Group, Inc. (JNY) said Wednesday that its third quarter profit rose 11% from last year, helped by cost-cutting measures, beating analyst estimates.

The New York-based company reported third quarter net income of $30.4 million, or 36 cents per share, compared with $27.3 million, or 33 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 46 cents per share.

On average, Wall Street analysts expected a much lower profit of just 27 cents per share.

Revenue fell 11% from last year, to $855.7 million. To combat the effects of the economic recession, Jones has been aggressively shuttering underperforming stores. It has closed 69 locations thus far, and plans to close a total of 265 stores by the end of next year.

Jones Apparel shares rose 40 cents, or +2.3%, in premarket trading Wednesday.

The Bottom Line
We had removed shares of JNY from our “recommended” list on Sept.22, when the stock was trading at $19.31. The company has a dividend yield of 1.13%, based on last night’s closing stock price of $17.69. The stock has technical support in the $14 price area. If the shares can continue to ramp, we see the next level of overhead resistance around the $20-$21 price levels. We would remain on the sidelines for now.

Jones Apparel Group, Inc. (JNY) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

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