Stage Stores Inc. reported its fiscal fourth-quarter profit rose 10% to $27.9 million, or 72 cents, for the period ended Jan. 30, up from $25.3 million, or 67 cents per share, a year ago. Sales fell 5% to $431.7 million from $455.8 million.
The performance beat the 69 cents-per-share estimate of analysts surveyed by Thomson Reuters.
For the year, Stage Stores earned $28.7 million, or 75 cents per share, compares with a loss of $65.5 million, or $1.71 per share, in the previous year. Annual sales declined 6% to $1.43 billion from $1.52 billion.
Andy Hall, President and Chief Executive Officer, commented, “We are
pleased with our fourth quarter results, in which we delivered a 9.9%
increase in net income and diluted earnings per share above our guidance
range. The improved performance was once again driven by strong
inventory control and expense management. In the quarter, gross margin
increased 180 basis points and SG&A expenses declined $2.1 million,
despite operating 19 additional stores. Gross profit benefited from
lower clearance levels, reduced freight expense and improved physical
inventory results, while the reduction in SG&A expenses reflects our
continued disciplined approach to managing costs.
“We are also pleased that we were able to drive 2009 diluted earnings
per share to within two cents of last year’s results in a year in which
our customers were negatively impacted by the recession. The 2009
performance was achieved by strengthening our gross profit rate by 40
basis points and reducing SG&A expenses by $12.7 million. Our balance
sheet remains in great shape. We ended the year with no borrowings on
our $250 million credit facility and $67 million more cash than last
year. Total debt obligations were $6 million lower than last year.
EBITDA for the fiscal year was $114 million and free cash flow, which we
define as net cash provided by operating activities less capital
expenditures, at $78 million, was our highest in five years.
“Operationally during the fiscal year, we opened 27 new stores,
relocated 10 stores and expanded 3 others. We purchased the Goody’s name
through their bankruptcy auction and branded 15 of our new and relocated
stores with the Goody’s nameplate. We also increased our market share in
those markets that used to overlap with a Goody’s store. We added 12
Estee Lauder and 11 Clinique counters, which included 8 combination
bays. We completed our North/South store realignment, consolidated
responsibility for all aspects of our nationwide cosmetics business,
successfully rolled out a new POS software platform and completed the
development of our markdown optimization tool for piloting and full
roll-out in 2010. It took a great team effort from our 13,000 associates
to accomplish so much in 2009.”
Mr. Hall concluded, “We are proud of the fact that we met our objectives
and enter 2010 a stronger company than when we began 2009. We have
confidence and momentum as we embark on our 2010 goals of growth in
sales, earnings and store count.”
Fiscal 2010 – First Quarter and Full Year
Looking ahead to the first quarter, Stage Stores anticipates results
between a loss of 2 cents per share to a profit of 2 cents per share on
sales of $332 million to $339 million. Comps are predicted to be flat
to down 2%.
Stage Stores forecasts a full-year profit of 80 cents to 90 cents per
share on sales of $1.44 billion to $1.47 billion. Comps are predicted
to be down 1 percent to up 1 percent.
Commenting on the Company’s projections, Hall stated, “While we
believe that 2010 will be another challenging year, we are nonetheless
projecting growth in sales, operating margin and diluted earnings per
share. We are planning to open 30 — 35 new stores and we expect to spend
$40 – $45 million in net capital expenditures.
“For the first quarter, we are projecting comparable store sales to be
in a range of down 2.0% to flat. Within the quarter, we expect
comparable store sales for March to be up mid single digits and for
April to be down low to mid single digits, both of which reflect the
Stage Stores has 758 stores in 39 states under the Bealls, Goody’s, Palais Royal, Peebles and its namesake brand.