Jones Apparel Still Has Wrinkles

SAN FRANCISCO -- Jones Apparel(JNY Quote) is on the mend, but it still has a long way to go.

The clothing and accessories maker handily topped estimates for the third quarter, but its sales and operating profits continued to decline.

The company -- owner of fashion brands such as Nine West, Anne Klein and Bandolino -- pointed to unseasonably warm weather and a weak economic climate as reasons for the continued sales weakness. Moreover, it said it remains cautious about these factors heading into the key holiday season.

The economic headwinds come as Jones struggles to turn around an ongoing downturn in its financial results. The company has been hit by fashion missteps, waning demand for its middle-tier goods and consolidation among department stores, Jones' top customers.

Profit in the third quarter jumped to $400.1 million, or $3.97 a share, from $63 million, or 56 cents, a year ago. The results included a big gain from Jones' August sale of the Barneys luxury chain to Istithmar, the Dubai government's private-equity arm, for $945 million.

Excluding the sale, along with some restructuring costs, the company would have made 51 cents a share in the third quarter, down from 59 cents a year earlier. That topped the average estimate of analysts surveyed by Thomson Financial, which called for a profit of 34 cents a share.

The earnings beat sent shares of Jones Apparel up 5.6% in afternoon trading to $20.80. The stock had surged as much as 17% earlier in the session before pulling back.

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