Stage Stores, Inc. reported comparable sales were down 3.6 percent for the second quarter ended July 29, 2017. Total sales increased 11.4 percent to $377.1 million, as compared to $338.4 million in the prior year. The net loss for the quarter was $6.3 million, or a 23 cents loss per diluted share. On an adjusted basis, the second quarter net loss was $4.1 million, or 15 cents per diluted share.
Adjusted second quarter 2017 results exclude after-tax charges related to the Gordmans acquisition and other store closures of approximately $2.2 million, or 8 cents per diluted share. The prior year’s adjusted second quarter results exclude after-tax charges related to severance associated with workforce reductions and strategic store closures of approximately $0.8 million, or 3 cents per diluted share.
“We are pleased to have gained momentum in our business during the second quarter, with sequential improvement that culminated with comparable sales turning positive in July,” said Michael Glazer, President and Chief Executive Officer. “Several encouraging trends have emerged that contributed to our 600 basis point comparable sales improvement from the first quarter of this year. Notably, our stores in the four energy states, which include the border stores and account for more than 50 percent of our comparable sales, outperformed the balance of the chain. Our direct-to-consumer business grew double digits and our non-apparel categories had a positive quarterly comp increase.
“As we continue to integrate our new off-price Gordmans business into the Stage infrastructure, we are excited to see the overwhelming support from the vendor community,” continued Mr. Glazer. “Our work to date, along with the compelling merchandise value in the marketplace, furthers our strong prospects for the growth of this business.
“Looking ahead to the Fall season, we remain disciplined in managing expenses and inventory. We feel great about our inventory position, which is down 7 percent in our department stores. Based on our improved performance, we are raising guidance for the fiscal year. We are managing our business for the long term with a focus on generating positive free cash flow and delivering value to our shareholders through the dividend.”
2017 Guidance
Stage Stores is raising its guidance for 2017. Adjusted loss per diluted share is now expected to be between 90 cents and $1.35, compared to the prior guidance of an adjusted loss of 95 cents to $1.55. Updated 2017 guidance assumes comparable sales are in a range of -4 percent to -7 percent, excludes after-tax charges associated with the Gordmans acquisition, and store closures and other strategic initiatives totaling approximately 23 cents per diluted share.
