But the earnings results did top the market's expectations, "partially as we benefited from about $27 million in net shipments and $11 million in associated operating income in the quarters, which we had planned in the second quarter," Peter Bonepath, the company's president/CEO told analysts yesterday during a conference call. "The better-than-expected results were primarily seen in our better wholesale apparel businesses."

Excluding Barneys New York, which Jones Apparel acquired in the second half of last year, comparable store sales for the company's owned footwear and ready-to-wear stores were down 3.7%, and company officials attributed the increase in Q1 revenues to the addition of Barneys. "We are very encouraged by the continued strong performance of our Barneys New York luxury retail business that generated a comparable store sales increase of 10.7%," Bonepath told analysts. "But gross margin pressure in our wholesale footwear, accessories and junior denim businesses dampened our overall results."

"The acquisition of Barneys, as well as Maxwell Shoe, added $180.7 million to our revenues during the quarter," Wesley Card, the company's COO and CFO told analysts yesterday. "Our operating profit margin was 11.7% compared to 13.3% in the prior year, primarily because of our footwear, accessories and our l.e.i junior denim business. Our operating cash flow during the period improved by $25.1 over Q1 2004, as our working capital planning remained disciplined."

Card also reported that inventory at the end of Q1 was $645.8 million, up from $570 million, but again it was the Barney's New York and Maxwell Shoe factor. If you subtract the latter two, inventory at the end of Q1 was actually down 3% from a year earlier.

And the ongoing results have forced Jones Apparel to slightly lower its sights a bit for the rest of the year.

"We feel that it is prudent to maintain a cautious outlook for the remainder of the year, with customer consolidation and macroeconomic issues potentially creating consumer concerns," Bonepath told analysts. "For that reason, we are tightening our 2005 expected revenue to a range of $5.20 to $5.25 billion, and our projected earnings per share to a range of $2.75 to $2.85.

"Over the long term, we remain confident in our multi-brand, multi-channel business model, which serves as the cornerstone of our strategy," Bonepath concluded.

Jones Apparel, a designer, marketer and wholesaler of branded apparel, footwear and accessories, also sells directly to consumers through its specialty stores and its Barneys New York luxury stores. Besides Jones New York, its brands include Evan-Picone, Gloria Vanderbilt, Nine West, Bandolino, Joan & David, Anne Klein and Barneys New York, to name a few. The company also markets apparel under the Polo Jeans brand licensed from Polo Ralph Lauren; costume jewelry under the Tommy Hilfiger brand licensed from Tommy Hilfiger Licensing and the Givenchy brand licensed from Givenchy Corp; and footwear under the Dockers Women brand licensed from Levi Strauss.