Stage Stores, Inc.reported net income of $9.1 million, or 24 cents per diluted share, for the second quarter ended August 1, 2009, compared to net income of $9.7 million, or 25 cents per diluted share, for the prior year second quarter ended August 2, 2008.
Mr. Hall continued, “We opened our first three stores in former Goody’s markets under the Goody’s name on August 6th. We plan to open eleven more Goody’s stores over the next three months, taking advantage of the current economic environment by negotiating very attractive lease rates for these new stores. As the former Goody’s store format is comparable to ours, the net capital investment in these locations is about one half of our typical new store expenditure. In addition to the 2009 openings, we expect to open 30 – 35 stores in former Goody’s markets in future years.
“With regard to our other priorities, we remain on track for a fall pilot of our markdown optimization tool in select merchandise zones and the fall roll-out of our new POS software platform. The markdown optimization tool will benefit sales and gross margin after its company-wide roll-out in 2010. Our north/south store realignment was executed successfully, and the new merchandise assortments for the 83 affected stores will be fully transitioned by the end of September.
“We remain financially sound, with strong operating cash flow, comparable store inventories down 11% and no borrowings on our $250 million credit facility,” Mr. Hall concluded.
Fiscal 2009 – Third Quarter, Fourth Quarter and Updated Full Year Guidance
Commenting on the company’s guidance, Mr. Hall stated, “We expect the macroeconomic conditions to remain challenging during the second half of the year. However, we believe our comparable store sales will benefit from easier comparisons, a more favorable holiday calendar, the anniversary of Hurricane Ike (September 2008) and Goody’s exiting over 100 of our markets. As such, we are projecting a third quarter comparable store sales decrease of 4.0% to 7.0%, and a fourth quarter comparable store sales decrease of 5.0% to 8.0%. For the fiscal year, we are projecting a comparable store sales decrease of 7.0% to 8.5%. We are raising the low end of our EPS guidance range for the fiscal year, and are now projecting $0.47 to $0.65.”
3Q 2009 OUTLOOK
|Diluted Shares (m)||38,080||38,603|
4th Quarter 2009:
4Q 2009 OUTLOOK
|Diluted Shares (m)||38,800||37,994|
FY 2009 OUTLOOK
|Diluted Shares (m)||38,600||38,729|
|Stage Stores, Inc.|
|Condensed Consolidated Statements of Income|
|(in thousands, except earnings per share)|
|Thirteen Weeks Ended|
|August 1, 2009||August 2, 2008|
|Amount||% to Sales (1)||Amount||% to Sales (1)|
Cost of sales and related buying, occupancy and distribution expenses
|Selling, general and administrative expenses||83,854||24.5||%||88,521||23.8||%|
|Store opening costs||465||0.1||%||1,231||0.3||%|
|Interest expense, net of income of $15 and $6, respectively||1,141||0.3||%||1,221||0.3||%|
|Income before income tax||14,737||4.3||%||15,585||4.2||%|
|Income tax expense||5,644||1.7||%||5,922||1.6||%|
|Basic and diluted earnings per share data:|
|Basic earnings per share||$||0.24||$||0.25|
|Basic weighted average shares outstanding|