JONES GROUP INC. $13 (New York symbol JNY; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 81.0 million; Market cap: $1.1 billion; Price-to-sales ratio: 0.3; Dividend yield: 1.5%; TSINetwork Rating: Average; www.jonesgroupinc- .com) designs clothing, accessories and footwear for men and women. Major brands include Jones New York, Gloria Vanderbilt, Rachel Roy, Anne Klein and Nine West. Jones sells its products through department stores and 594 company-owned outlets.
As part of an ongoing restructuring, Jones closed 103 stores in 2012, and plans to close more in 2013. It’s also improving the quality of its products and making acquisitions. For example, in June 2012 it paid $5.5 million for the rights to upscale shoes by designer Brain Atwood.
Even with these new businesses, Jones’s sales rose just 0.3% in 2012, to $3.80 billion from $3.79 billion in 2011. Higher costs for cotton and labour caused its earnings to fall 11.3%, to $93.7 million from $105.6 million. Due to fewer shares outstanding, earnings per share fell just 4.6%, to $1.24 from $1.30.
Jones’s earnings will likely fall to $1.20 a share in 2013. The stock trades at 10.8 times that forecast. The $0.20 dividend yields 1.5%.
Jones Group is a hold.
