Stage Stores, Inc. net income for the third quarter
ended November 1, 2003 was $12.9 million, or $0.63 per diluted share, compared to $10.2 million, or $0.50 per diluted share, for the prior year third quarter ended November 2, 2002. This year's third quarter results includes an after tax net gain of $7.8 million, or $0.38 per diluted share, related to the sale of the Company's private label credit card portfolio, and an after tax charge of $0.5 million to interest expense due to the write-off of unamortized debt issue costs associated with the termination of the Company's former senior secured
revolving credit facility.
Total sales for the 13-week period decreased 3.2% to $197.9
million from $204.4 million last year. Comparable store sales
decreased 7.1% during the quarter.
In addition to reporting its third quarter financial results, the
Company highlighted the following major third quarter events:
-- Signed a definitive agreement to acquire Peebles Inc. on
October 7th, and completed the acquisition on November 4th. As
such, the Company's results for the third quarter do not
include any operating results from Peebles.
-- Sold its private label credit card portfolio to a subsidiary
of Alliance Data Systems Corporation on September 12th and
began a long-term strategic relationship with them. Concurrent
with the closing of the transaction, the Company paid off the
outstanding balance under its securitization facility.
-- Authorized a $50 million Stock Repurchase Program on October
1st.
-- Replaced its previous $125 million revolving credit facility
with a new $175 million revolving credit facility, and on
November 4th, further increased its credit facility commitment
to $250 million in connection with the Peebles acquisition.
-- Opened 13 new stores.
-- Introduced Polo by Ralph Lauren with an initial 25 store test.
Commenting on the third quarter's performance, Jim Scarborough,
Chairman, President and Chief Executive Officer, stated, “We are
enthusiastic and pleased with the strategic progress that we made at
Stage during the third quarter. We believe the sale of our credit
operations, and the acquisition of Peebles, position our Company for
significant future sales and earnings growth, greatly expands our
geographic presence, improves our competitive position, enhances our
financial flexibility, and will result in stronger returns for our
shareholders in the future.”
Mr. Scarborough continued, “Although our sales during the quarter
were lower than anticipated, our earnings came in at the high end of
our previously provided range. As we enter the fourth quarter, our
merchandise content is fresher and more current than last year, and
our inventory is at appropriate levels. We believe we are well
positioned for the holiday shopping season, with great selections and
assortments of the preferred brands that we believe will have the
greatest appeal for our customers.”
Net income for the nine-month period ended November 1, 2003 was
$35.4 million, or $1.77 per diluted share, compared to $38.3 million,
or $1.80 per diluted share, in the prior year period. Total sales for
the 39-week period decreased 2.4% to $603.7 million from $618.6
million last year. Comparable store sales decreased 6.0% versus the
same 39-week period last year.
Stage Stores, Inc.
Consolidated Statements of Income
(in thousands, except earnings per share)
(unaudited)Thirteen Weeks Ended
---------------------------------
November 1, 2003 November 2, 2002
--------- ------ --------- ------
Amount % to Amount % to
Sales Sales
--------- ------ --------- ------Net sales $197,949 100.0% $204,420 100.0%
Cost of sales and related buying,
occupancy and distribution expenses 142,719 72.1% 147,422 72.1%
--------- ------ --------- ------
Gross profit 55,230 27.9% 56,998 27.9%
Selling, general and administrative
expenses 45,376 22.9% 40,006 19.6%
Store opening costs 818 0.4% 400 0.2%
Interest, net 928 0.5% 377 0.2%
Gain on sale of proprietary credit
card portfolio, net (12,218) -6.2% - 0.0%
--------- ------ --------- ------
Income before income tax 20,326 10.3% 16,215 7.9%
Income tax expense 7,419 3.7% 6,000 2.9%
--------- ------ --------- ------
Net income $ 12,907 6.5% $ 10,215 5.0%
========= ====== ========= ======Earnings per common share data:
Basic earnings per common share $ 0.68 $ 0.53
========= =========
Basic weighted average common shares
outstanding 19,007 19,362
========= =========Diluted earnings per common share $ 0.63 $ 0.50
========= =========
Diluted weighted average common
shares outstanding 20,489 20,289
========= =========
