Saks 4Q Profit Widens on Strong Performance in Older Stores
Erasing year-ago losses, Saks (NYSE:SKS) reported on Wednesday a stronger-than-expected jump in fourth-quarter profit, lifted by improved comparable-store sales as men and women’s apparel spending continued to rebound.
The New York-based company posted net income of $25 million or 14 cents a share, compared with a loss of $4.6 million, or 3 cents a share, in the same quarter last year.
Excluding one-time items, the company earned 13 cents a share, ahead of average analyst estimates polled by Thomson Reuters of 8 cents.
Revenue for the fashion retailer was $866.3 million, up from $811.3 million a year ago, beating the Street’s view of $859.2 million.
“The meaningful year-over-year improvement resulted from comparable store sales increases and gross margin rate expansion,” Saks CEO Stephen I. Sadove said in a statement. “Our team executed very well during the year as we strategically moved from defense to offense.”
The department-store chain saw gains from higher comparable store sales, up 8.4% during the quarter ahead of company expectations, led by stronger demand for women’s and men’s apparel, handbags and shoes. The performance was partially offset by disappointing results in the company’s flagship store in New York City.
Saks improved its gross margin to 37.8% from 36.5% in the year-earlier period, helped by increased full-price selling and a reduced level of promotional activity.
Looking ahead, Sadove said the company remains cautiously optimistic about the overall tone of business, though Saks remains committed to its core strategies and will continue to take balanced risks and make investments in inventory and infrastructure.
Saks anticipates comparable stores sales to grow in the mid-single digit range for the full-year.