reported an 18% drop in profits and a 6.5% decline in third-quarter revenue owing to the sale of its Polo Jeans business earlier this year.
The clothing company's earnings fell to $63 million, or 56 cents a share, from $76.8 million, or 65 cents a share, in the previous year. Before items, Jones would have earned 63 cents in the latest quarter. Wall Street wanted to see 66 cents.
Revenue for the quarter totaled $1.24 billion and matched analysts' estimates. Last year's sales of $1.33 billion included a $78.4 million contribution from Polo Jeans.
Even though profits slipped, Jones raised its dividend by 17% to 14 cents a share from 12 cents. Although management remained confident about the company's progress and long-term business model, it displayed caution, as well.
"We continue to monitor the risks associated with volatile consumer spending patterns, consolidation in our wholesale distribution channel, historically high fuel prices and increased interest rates, which combine to form meaningful challenges," said Peter Boneparth, Jones Apparel's president and chief executive. "We remain cautiously optimistic for the remainder of the year and are affirming our target 2006 full-year adjusted earnings per share of $2.19, which is consistent with our prior guidance."
Jones Apparel fell 2.9% to $32.29 Wednesday.