J Crew (JCG) 8-K J. Crew Group, Inc. Announces Fourth Quarter and Fiscal 2007 Results

EXHIBIT 99.1

Company Contact:

James Scully

Chief Financial Officer

(212) 209-8040

Investor Contact:

Allison Malkin/Chad Jacobs/Joe Teklits

Integrated Corporate Relations

(203) 682-8200

J. CREW GROUP, INC. ANNOUNCES FOURTH QUARTER AND FISCAL 2007 RESULTS

Fourth Quarter Diluted EPS of $0.39, including impact of severance charge of $0.02

Introduces Guidance for Fiscal 2008 Diluted EPS Range of $1.85 to $1.87

New York, NY – March 11, 2008 – J. Crew Group, Inc. [NYSE:JCG] today announced financial results for the fourth quarter and fiscal year ended February 2, 2008 (fiscal 2007). The Company noted that the prior year, fiscal 2006, consisted of 53 weeks, resulting in a 14-week fiscal fourth quarter in the prior year. The 53^rd week is not included in comparable store sales calculations for fiscal 2006 periods.

For the three months ended February 2, 2008 (fourth quarter):

• Revenues increased 9% to $399.9 million. Store sales (Retail and Factory) increased 8% to $260.6 million, with comparable store sales remaining flat. Realigning last year’s calendar weeks to be consistent with the current year retail calendar weeks would result in a comparable store sales increase of 4% in the fourth quarter of fiscal 2007. Comparable store sales rose 7% in the fourth quarter of fiscal 2006. Direct sales (Internet and Catalog) rose by 11% to $126.0 million. Direct sales increased 43% in the fourth quarter of fiscal 2006. The impact of the 53^rd week of fiscal 2006 on Store and Direct sales was $8.2 million and $4.0 million, respectively.

• Gross margin increased to 41.3% of revenues from 40.8% of revenues in the fourth quarter of fiscal 2006.

• Operating income increased 16% to $43.3 million, or 10.8% of revenues, compared to $37.3 million, or 10.2% of revenues, in the fourth quarter of fiscal 2006. Operating income in the fourth quarter of the current period includes the impact of the recognition of severance costs of $2.3 million. Operating income adjusted for severance costs increased 22% to $45.6 million, or 11.4% of revenues.

• Net income available to common stockholders in the fourth quarter of fiscal 2007 was $25.0 million, or $0.39 per diluted share and includes the impact of the recognition of severance costs of approximately $0.02 per diluted share. The current year period reflects an effective tax rate of 39.8%.

• Net income available to common stockholders in the fourth quarter of fiscal 2006 was $44.0 million, or $0.71 per diluted share, and includes a non-recurring tax benefit of $10.9 million related to the recognition of deferred tax assets that were previously reserved.

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• Adjusted net income for the fourth quarter of fiscal 2007 totaled $26.3 million, or $0.41 per diluted share (see Exhibit 3), as compared to adjusted net income of $20.5 million, or $0.33 per diluted share for the fourth quarter of fiscal 2006 (see Exhibit 4).

• A reconciliation of net income on a GAAP basis to adjusted net income is included in Exhibits (3) and (4) of this press release.

Millard Drexler, J. Crew’s Chairman and CEO stated: “We are very pleased with our fourth quarter and fiscal year results. It’s our mission that every single customer who shops with us knows the lengths we are willing to go in order to satisfy them. We couldn’t be happier with what our customers are saying about our quality, our design and their experience with us. At the end of the day, when they are happy we see the results.”

For the fiscal year ended February 2, 2008 (fiscal 2007):

• Revenues increased 16% to $1,334.7 million. Store sales (Retail and Factory) increased 13% to $914.8 million, with comparable store sales increasing 6%. Realigning last year’s calendar weeks to be consistent with the current year retail calendar weeks would result in a comparable store sales increase of 6% in fiscal 2007. Comparable store sales rose 13% in fiscal 2006. Direct sales (Internet and Catalog) increased 22% to $377.4 million. As previously noted, the impact of the 53^rd week of fiscal 2006 on Store and Direct sales was $8.2 million and $4.0 million, respectively.

• Gross margin increased to 44.1% of revenues from 43.4% of revenues in fiscal 2006.

• Operating income increased 37% to $172.5 million, or 12.9% of revenues, compared to $125.6 million, or 10.9% of revenues, in fiscal 2006. Operating income in fiscal 2007 includes the impact of the recognition of severance costs of $2.3 million. Operating income adjusted for severance costs increased 39% to $174.7 million, or 13.1% of revenues.

• Net income available to common stockholders for fiscal 2007 was $97.1 million, or $1.52 per diluted share, and includes the impact of the recognition of severance costs of approximately $0.02 per diluted share. The current year period reflects an effective tax rate of 39.8%.

• Net income available to common stockholders for fiscal 2006 was $71.6 million, or $1.49 per diluted share and includes pre-tax charges of $10.0 million related to the refinancing of debt and a non-recurring tax benefit of $10.9 million related to the recognition of deferred tax assets that were previously reserved.

• Adjusted net income for fiscal 2007 totaled $98.5 million, or $1.54 per diluted share (see Exhibit 3), as compared to adjusted net income of $65.2 million, or $1.05 per diluted share, for fiscal 2006 (see Exhibit 4).

• A reconciliation of net income on a GAAP basis to adjusted net income is included in Exhibits (3) and (4) of this press release.

Balance Sheet highlights as of February 2, 2008:

• Inventories were $158.5 million, reflecting the impact of 33 net stores opened since the end of fiscal 2006.

• Long-term debt was reduced to $125 million, which reflects the Company’s voluntary principal prepayments of $75 million made during fiscal 2007.

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Guidance

The Company’s long-term financial targets include comparable store sales growth in the mid single digit range, Direct sales growth in the high single digits, net square footage expansion in the 7% to 9% range, and diluted EPS growth in excess of 20%.

The Company currently expects fiscal 2008 diluted earnings per share in the range of $1.85 to $1.87.

Use of Non-GAAP Financial Measures

In addition to providing financial results in accordance with GAAP, the Company has provided non-GAAP adjusted interest expense, loss on refinancing of debt, income taxes, net income, preferred stock dividends and earnings per share information for the three months and fiscal year ended February 3, 2007 in this release. This information reflects, on a non-GAAP adjusted basis, the Company’s adjusted interest expense, loss on refinancing of debt, income taxes, net income, preferred stock dividends and earnings per share after excluding the effects of transactions which resulted from the Company’s initial public offering, refinancings and adjusted tax rates. The Company has provided non-GAAP adjusted selling, general and administrative expenses, operating income, income taxes, net income and earnings per share information for the three months and fiscal year ended February 2, 2008. This information reflects, on a non-GAAP adjusted basis, the Company’s adjusted SG&A, operating income, income taxes, net income and earnings per share after excluding the severance costs recorded in connection with the departure of a senior executive. This non-GAAP financial information is provided to enhance the user’s overall understanding of the Company’s current financial performance. Specifically, the Company believes the non-GAAP adjusted results provide useful information to both management and investors by excluding expenses that the Company believes are not indicative of the Company’s future results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, net income, earnings per share or other measures of financial performance prepared in accordance with GAAP. This non-GAAP information and a reconciliation of this information to GAAP amounts for the three months and fiscal year ended February 2, 2008 and the three months and fiscal year ended February 3, 2007 are included in Exhibits (3) and (4), respectively.

Conference Call Information

A conference call to discuss fourth quarter results is scheduled for today, March 11, 2008, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-0784 approximately ten minutes prior to the start of the call. The conference call will also be webcast live atwww.jcrew.com. A replay of this call will be available until March 26, 2008 and can be accessed by dialing (877) 660-6853 and entering account number 3055 and conference ID number 276618.

About J. Crew Group, Inc.

J. Crew Group, Inc. is a nationally recognized multi-channel retailer of women’s and men’s apparel, shoes and accessories. As of March 8, 2008, the Company operates 203 retail stores (including four Crewcuts and seven Madewell stores), the J. Crew catalog business, jcrew.com, and 63 factory outlet stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company’s websitewww.jcrew.com.

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Forward-Looking Statements:

Certain statements herein are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, changes in the overall level of consumer spending or preferences in apparel, the performance of the Company’s products within the prevailing retail environment, trade restrictions, political or financial instability in countries where the Company’s goods are manufactured, postal rate increases, paper and printing costs, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company’s Form 10-K and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

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Exhibit (1)

J. Crew Group, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except percentages and per share amounts)	Three Months Ended February 2, 2008 (13 weeks)			Three Months Ended February 3, 2007 (14 weeks)			Fiscal Year Ended February 2, 2008 (52 weeks)			Fiscal Year Ended February 3, 2007 (53 weeks)
Net sales
Stores	$	260,627		$	241,832		$	914,810		$	808,542
Direct		126,020			113,233			377,444			308,611
		386,647			355,065			1,292,254			1,117,153
Other		13,288			11,605			42,469			34,947
Total Revenues		399,935			366,670			1,334,723			1,152,100
Costs of goods sold, buying and occupancy costs		234,956			216,886			746,180			651,748
Gross Profit		164,979			149,784			588,543			500,352
As a percent of revenues		41.3	%		40.8	%		44.1	%		43.4	%
Selling, general and administrative expenses		121,678			112,463			416,064			374,738
As a percent of revenues		30.4	%		30.7	%		31.2	%		32.5	%
Operating income		43,301			37,321			172,479			125,614
As a percent of revenues		10.8	%		10.2	%		12.9	%		10.9	%
Interest expense, net		1,847			3,965			11,224			43,993
Loss on refinancing of debt		—			—			—			10,039
Income before income taxes		41,454			33,356			161,255			71,582
Provision (benefit) for income taxes		16,497			(10,600	)		64,180			(6,200	)
Net income		24,957			43,956			97,075			77,782
Preferred stock dividends		—			—			—			(6,141	)
Net income applicable to common shareholders	$	24,957		$	43,956		$	97,075		$	71,641
Income per share:
Basic	$	0.41		$	0.75		$	1.61		$	1.61
Diluted	$	0.39		$	0.71		$	1.52		$	1.49
Weighted average shares outstanding:
Basic		60,752			58,328			60,346			44,558
Diluted		64,003			62,144			63,748			48,039

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Exhibit (2)

J. Crew Group, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)	February 2, 2008		February 3, 2007
Assets
Current assets:
Cash and cash equivalents	$	131,510	$	88,900
Inventories		158,525		140,670
Prepaid expenses and other currents assets		33,293		30,728
Refundable income taxes		9,794		8,600
Deferred income taxes, net		—		8,200
Total current assets		333,122		277,098
Property and equipment, net		168,292		121,814
Deferred income taxes, net		20,188		15,600
Other assets		13,994		13,554
Total assets	$	535,596	$	428,066
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable	$	101,277	$	77,836
Other current liabilities		91,414		76,666
Income taxes payable		—		5,496
Deferred income taxes, net		2,382		—
Total current liabilities		195,073		159,998
Long-term debt		125,000		200,000
Deferred credits		67,600		62,448
Other liabilities		7,601		—
Stockholders’ equity		140,322		5,620
Total liabilities and stockholders’ equity	$	535,596	$	428,066

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Exhibit (3)

Reconciliation of net income on a GAAP basis to “Adjusted net income” – Fiscal 2007

	Three Months Ended February 2, 2008									Fiscal Year Ended February 2, 2008
(In thousands, except percentages and per share amounts)	GAAP Basis			Adjustments			As Adjusted			GAAP Basis			Adjustments			As Adjusted
Total Revenues	$	399,935			—		$	399,935		$	1,334,723			—		$	1,334,723
Cost of goods sold, buying and occupancy costs		234,956			—			234,956			746,180			—			746,180
Gross profit		164,979			—			164,979			588,543			—			588,543
Selling, general and administrative expenses		121,678			(2,300	)(a)		119,378			416,064			(2,300	)(a)		413,764
As a percent of revenues		30.4	%					29.8	%		31.2	%					31.0	%
Operating income		43,301			2,300			45,601			172,479			2,300			174,779
As a percent of revenues		10.8	%					11.4	%		12.9	%					13.1	%
Interest expense, net		1,847			—			1,847			11,224			—			11,224
Income before income taxes		41,454			2,300			43,754			161,255			2,300			163,555
Provision for income taxes		16,497			916	(b)		17,413			64,180			916	(b)		65,096
Net income		24,957			1,384			26,341			97,075			1,384			98,459
Preferred stock dividends		—			—			—			—			—			—
Net income applicable to common shareholders	$	24,957		$	1,384		$	26,341		$	97,075		$	1,384		$	98,459
Earnings per share:
Basic	$	0.41		$	0.02		$	0.43		$	1.61		$	0.02		$	1.63
Diluted	$	0.39		$	0.02		$	0.41		$	1.52		$	0.02		$	1.54
Weighted average shares outstanding:
Basic		60,752			—			60,752			60,346		��	—			60,346
Diluted		64,003			—			64,003			63,748			—			63,748

(a) to adjust selling, general and administrative expenses for severance costs recorded in connection with the departure of a senior executive.

(b) to adjust provision for income taxes to reflect the tax impact of the adjustment described in (a) above.

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Exhibit (4)

Reconciliation of net income on a GAAP basis to “Adjusted net income” – Fiscal 2006

	Three Months Ended February 3, 2007								Fiscal Year Ended February 3, 2007
(In thousands, except percentages and per share amounts)	GAAP Basis			Adjustments			As Adjusted		GAAP Basis			Adjustments			As Adjusted
Total Revenues	$	366,670			—		$	366,670	$	1,152,100			—		$	1,152,100
Cost of goods sold, buying and occupancy costs		216,886			—			216,886		651,748			—			651,748
Gross profit		149,784			—			149,784		500,352			—			500,352
Selling, general and administrative expenses		112,463			—			112,463		374,738			—			374,738
Operating income		37,321			—			37,321		125,614			—			125,614
Interest expense, net		3,965			—			3,965		43,993			(24,556	)(a)		19,437
Loss on refinancing of debt		—			—			—		10,039			(10,039	)(b)		—
Income before income taxes		33,356			—			33,356		71,582			34,595			106,177
Provision (benefit) for income taxes		(10,600	)		23,475	(c)		12,875		(6,200	)		47,184	(c)		40,984
Net income		43,956			(23,475	)		20,481		77,782			(12,589	)		65,193
Preferred stock dividends		—			—			—		(6,141	)		6,141	(d)		—
Net income applicable to common shareholders	$	43,956		$	(23,475	)	$	20,481	$	71,641		$	(6,448	)	$	65,193
Earnings per share:
Basic	$	0.75		$	(0.40	)	$	0.35	$	1.61		$	(0.48	)	$	1.13
Diluted	$	0.71		$	(0.38	)	$	0.33	$	1.49		$	(0.44	)	$	1.05
Weighted average shares outstanding:
Basic		58,328			—			58,328		44,558			13,339	(e)		57,897
Diluted		62,144			—			62,144		48,039			14,242	(e)		62,281

(a) to adjust interest expense for (i) the redemption of all outstanding preferred stock, (ii) the conversion of the 5% notes payable into common stock, (iii) the redemption of $21.7 million of the 13 ¹/8% debentures, (iv) the repayment of $275.0 million aggregate principal amount of 9 ³/4% notes with the proceeds of the $285.0 million senior term loan, (v) the repayment of $35.0 million of the senior term loan with the proceeds of the IPO completed in July 2006 and (vi) the amortization of deferred financing costs related to the term loan entered into in May 2006, assuming each of these transactions had been completed at the beginning of the fiscal year.

(b) to eliminate the loss on refinancing of debt.

(c) to adjust the provision (benefit) for income taxes which includes a one-time benefit related to the recognition of deferred tax assets that were previously reserved for and to reflect the Company’s estimated future ongoing effective tax rate of 38.6% as the effective tax rate in the three months and fiscal year ended February 3, 2007 is not representative of the Company’s ongoing effective tax rate.

(d) to reflect the redemption of $92.8 million of Series A preferred stock.

(e) to reflect the number of common shares outstanding after the IPO on a basic and diluted basis.

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Exhibit (5)

Actual and Projected Store Count and Square Footage

Actual Fiscal 2007

Quarter	Total stores open at beginning of the quarter	Number of stores opened during the quarter	Number of stores closed during the quarter	Total stores open at end of the quarter
1st Quarter	227	6	0	233
2nd Quarter	233	7	2	238
3rd Quarter	238	18	1	255
4th Quarter	255	6	1	260

Actual Fiscal 2007

Quarter	Total gross square feet at beginning of the quarter	Gross square feet for stores opened or expanded during the quarter	Reduction of gross square feet for stores closed or downsized during the quarter	Total gross square feet at end of the quarter
1st Quarter	1,543,904	22,615	0	1,566,519
2nd Quarter	1,566,519	33,961	(20,939)	1,579,541
3rd Quarter	1,579,541	87,645	(6,662)	1,660,524
4th Quarter	1,660,524	36,399	(8,907)	1,688,016

Projected Fiscal 2008

Quarter	Total stores open at beginning of the quarter	Number of stores opened during the quarter	Number of stores closed during the quarter	Total stores open at end of the quarter
1st Quarter	260	8	0	268
2nd Quarter	268	8	1	275
3rd Quarter	275	14	0	289
4th Quarter	289	13	0	302

Projected Fiscal 2008

Quarter	Total gross square feet at beginning of the quarter	Gross square feet for stores opened or expanded during the quarter	Reduction of gross square feet for stores closed or downsized during the quarter	Total gross square feet at end of the quarter
1st Quarter	1,688,016	43,712	(2,261)	1,729,467
2nd Quarter	1,729,467	28,340	(16,368)	1,741,439
3rd Quarter	1,741,439	69,271	0	1,810,710
4th Quarter	1,810,710	69,307	0	1,880,017

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