Jones Apparel Still Has Wrinkles

Jones' sales for the quarter fell to $1.03 billion from $1.08 billion a year ago. Still, the results were better than Wall Street's forecast of $998.9 million.

"Despite the continued challenges in the retail environment throughout the third quarter, which were primarily due to the unseasonably warm weather and economic conditions affecting our target consumer, our businesses performed in line with our expectations for the period," said Chief Executive Wes Card, who took the reins in July.

Same-store sales, or sales at stores open at least a year, were down 8.7%, even as Jones Apparel began turnaround efforts. The company said it resorted to heavy promotions to clear out excess inventory in September.

"While industry consensus is that there may be a bounce in sales as the weather inevitably is getting colder, we remain cautious in our forecast, given the current overall economic picture and our concern with the level of promotions that may be required to fuel sales in the fourth quarter," Card said in a conference call.

The company expects same-store sales to decrease 4.3% in the fourth quarter, which compares to a drop of about 1% in the same period last year.

As part of its turnaround, Jones Apparel is looking to cut $100 million in costs by the end of the year. It has also been shedding some of its brands, like its Moderate Sportswear lines, in order to focus more on core brands like Jones New York, Anne Klein and Nine West.

Its rival, Liz Claiborne(LIZ Quote) has taken a similar approach but with far less promising results. On Tuesday, the company posted a 65% decline in profit.