Jones Apparel 1Q profit beats expectations

Clothing maker Jones Apparel Group Inc. on Wednesday reported first-quarter results that were much better than analysts expected but said it would close 225 stores in a cost-cutting move.

The New York-based company, whose brands include Nine West, Jones New York, Anne Klein and others, said it will close the stores in 2009 and 2010 for a total savings of $37 million over three years. Jones will also implement more job cuts in an effort to save $20 million annually. In January, the company announced a cost-cutting program to save $33 million a year, including 185 job cuts.

For the first quarter, net income totaled $300,000, or break even per share, down from $19.5 million, or 23 cents per share last year.

Excluding noncash impairment of assets due to store closings, severance and other expenses related to a restructuring, net income was 28 cents per share compared with 37 cents per share last year.

Analysts polled by Thomson Reuters, on average, predicted a profit 10 cents per share. Analyst estimates typically exclude one-time items.

Revenue fell 9 percent to $879.4 million from $963.4 million last year but that beat analyst expectations of $875.3 million. One bright spot was jeans sales, which rose 3 percent.

Jones, like many of its rivals, including Liz Claiborne Inc. and VF Corp., has suffered as major stores have cut back on inventory amid the severe pullback in consumer spending.

Lazard Capital Markets analyst Todd Slater called the results a "high quality beat on margins" and reiterated his "buy" rating on the stock.

In morning trading, Jones shares rose $1.37, 17 percent, to $9.39 in late trading Wednesday.