Comps up, income down at Saks
NEW YORK — Despite a significant decrease in net income, Saks delivered sales growth as it continues to improve its operating performance. Saks Inc. reported net income for the third quarter of $17.8 million, or 11 cents per diluted share, compared with net income of $36.3 million, or 20 cents per diluted share.
For the nine months ended Oct. 29, the company recorded net income of $37.8 million, or 24 cents per diluted share. For the prior year period, the company recorded net income of $22.9 million, or 14 cents per diluted share.
Stephen Sadove, chairman and CEO, noted, “I am very pleased with the improvement in our operating performance for the third quarter and nine months ended Oct. 29. Our 5.8% comparable-store sales increase for the third quarter was achieved in spite of further reductions in our promotional activity. I am especially pleased with our 160 basis point improvement in our third quarter gross margin rate.”
Comparable-store sales grew 10.3% for the nine months, the company reported.
Revenue for the quarter increased 5% to $692.3 million from $658.8 million, surpassing analysts’ predictions of $690.6 million.
At the company's Saks Fifth Avenue stores, women's contemporary apparel, women's shoes, handbags and jewelry were among the strongest merchandise categories during the quarter. Saks Direct saw its fourth-quarter comps increase 24%, while OFF 5TH's comps were below the company’s aggregate comparable-store sales performance for both the quarter and nine months.
Sadove noted, “We continue to be optimistic about the future of luxury retailing in general and for Saks Fifth Avenue in particular, and we believe Saks is well-positioned for additional operating margin improvement over time. In light of the geopolitical and macroeconomic environment, we will continue to approach the future both cautiously and strategically. We remain very focused in our expense, capital, and inventory spending, targeting areas that we believe have the most opportunity for future profitable growth.”
For the fourth quarter, the company said it expects same-store sales growth to be in the mid-to-high single-digit range.