Saks Inc.’s fiscal first-quarter earnings rose 51 percent, reflecting solid same-store sales growth and improved margins. The upscale earned reported a profit of $28.4 million, or 16 cents a share, up from $18.8 million, or 11 cents a share, a year earlier. Excluding items such as store-closing and debt-extinguishment costs, earnings rose to 17 cents a share from 12 cents.
Sales rose 8.8 percent to $726 million, while same-store sales jumped 10.2 percent.
Stephen I. Sadove, Chairman and Chief Executive Officer of the Company,
noted, “I am very pleased with our first quarter results. Our improved
year-over-year performance was driven by a 10.2% comparable store sales
increase and continued gross margin rate improvement.”
In the Saks Fifth Avenue stores, several merchandise categories showed strength during the first quarter, including women’s and men’s apparel, handbags, and shoes. For the quarter, the sales increase in the New York City flagship store was in line with the company’s aggregate comparable store sales performance.
Saks Direct posted an approximate 25 percent comparable store sales increase in the first quarter. OFF 5TH’s comparable store sales performance was below the company’s aggregate comparable store sales performance for the quarter.
The company generated 100 basis points of year-over-year gross margin rate improvement in the first quarter, to 44.1 percent this year from 43.1% in last year’s first quarter. The improvement primarily resulted from increased full-price selling.
As a percent of sales, SG&A expenses were 24.6 percent this year compared to 24.5 percent in the prior year. As expected, the company incurred incremental expenses to support the growth in Saks Direct as well as targeted incremental media spending and an increase in employee benefit expense.
The company generated operating income (excluding certain items) of 8.7 percent of sales in the current year first quarter compared to 7.1 percent in the prior year first quarter.
