The Jones Group’s (NYSE:JNY) stock has continuously declined after the company trimmed its 2012 revenue outlook.  The firm has cited an exceptionally “promotional” apparel market and trends experienced in Q4 2011 as reasons for trimming its outlook. We believe the revised outlook reflects primarily the lackluster performance of Jones during holidays 2011. Jones Group competes with brands like Liz Claiborne (NYSE:LIZ) and Phillips-Van Heusen (NYSE:PVH) as well as department store mainstays such as Polo Ralph Lauren (NYSE:RL) and store-owned private labels.
Tough retail environment, lackluster holidays sales
Apart from the heavy promotions, we believe a lackluster 2011 holiday season was also equally responsible for Jones trimming its revenue outlook for 2012. Earlier we discussed how lack of adequate prepping for the holidays cost Jones heavily and forced the company to shell out markdowns in the range of 80%, considered very high provided the aspirational luxury nature of Jones.
See our article: Jones Update: Large Markdowns During Holidays Could Hit Results
Additionally, we believe that the company may be in for further turmoils, going ahead. We expect the large markdowns at the end of holiday season to take a hit at Jones’ margins, going ahead.Notes: