Saks Inc. (NYSE: SKS) reported an adjusted second-quarter net loss of $0.05 and $704 million in revenues before markets opened this morning. In the same period a year ago, the luxury department store reported a net loss of $0.05 on revenue of $670 million. Second-quarter results compare to the Thomson Reuters consensus estimates for a net loss of $0.09 and $704 million in revenue.
Saks reaffirmed guidance for same-store sales growth in the mid-single digit range for the rest of the fiscal year. Gross margins are expected to increase by 25 to 50 basis points, primarily in the fourth quarter, while third-quarter gross margins are expected to be flat with last year. Gross margins in the second quarter came in at 37.2%, somewhat lower than the 38% posted in the same period a year ago. The decline in gross margins was attributed to markdowns in “certain merchandise categories” in order to clear out inventory.
The company’s chairman and CEO said:
Our comparable store sales increases of 4.7% in both the second quarter and six months were on top of very strong 15.5% and 12.7% increases in the second quarter and first six months of last year, respectively.
Saks noted second-quarter strength in sales of men’s and women’s contemporary apparel, shoes, fashion and fine jewelry, as well as cosmetics and fragrances.
Compared with both Nordstrom Inc. (NYSE: JWN) and Macy’s Inc. (NYSE: M), both of which reported earnings last week, Saks performed about equally, slightly besting the consensus EPS estimate and meeting the revenue estimate. Nordstrom forecast slightly better sales growth than the others, while margin projections were similar for all three stores.
Shares are inactive in premarket trading, and closed last night at $10.85. The current 52-week range is $7.67 to $12.14. Thomson Reuters had a consensus analyst price target of $10.50 before today’s results were announced.
Paul Ausick
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