Stage Stores Inc. reported that for the second quarter, comparable sales decreased 0.2 percent. Loss before income tax was $16.8 million compared to a loss before income tax of $9.6 million in the second quarter 2017, driven by investments in the growth of the off-price business, additional supply chain costs, and increased promotional markdowns.

“Our comparable sales results for the second quarter reflected a sequential improvement of 260 basis points versus the first quarter,” commented Michael Glazer, president and chief executive officer. “While our department store business was challenged in the middle of the quarter, we saw comparable sales increase in late July. Gordmans comparable sales increased 11 percent during the second quarter, and we are particularly encouraged by the momentum created by our back-to-school business that began late in the quarter. We continue to be pleased with inventory content and levels, with department store inventory lower than last year, and normalized inventory in Gordmans.”

Glazer continued, “Looking ahead, many of our underlying first half trends provide optimism for the back half of the year, including our growing off-price business, trending non-apparel categories which will make great holiday gifts, and strong momentum in our e-commerce business which is the most highly penetrated in the fourth quarter. As a result, we anticipate 2018 EBITDA will increase 40 percent versus 2017 at the middle of our updated guidance range. In addition, we are pleased to have ended the second quarter with $95 million in excess availability, including the impact of our recent credit facility amendment, which illustrates the strong relationship we have with our bank partners.”

Second Quarter Results

Second quarter 2018 results compared to second quarter 2017 results were as follows:

  • Net sales were $369 million compared to $377 million
  • Comparable sales decreased 0.2 percent for the total company, decreased 2.2 percent for department stores, and increased 11.4 percent for Gordmans off-price stores
  • Net loss was $16.9 million compared to a net loss of $6.3 million
  • Loss per share was $0.60 compared to a loss per share of $0.23
  • EBIT was $(14.1) million compared to $(7.7) million

2018 Guidance

For fiscal 2018, the company reaffirmed the following guidance:

  • Net sales between $1,610 million and $1,640 million
  • Comparable sales of flat to an increase of 2.0 percent
  • Depreciation and amortization between $55 million and $60 million
  • Capital expenditures of $30 million to $35 million

For fiscal 2018, the company updated the following guidance:

  • Net loss of between $41 million and $34 million
  • Tax rate of 0 percent, which, when compared to 2017, is expected to negatively impact 2018 EPS by $0.30 to $0.35 per diluted share, or net loss by $8 million to $10 million
  • Loss per diluted share between $1.45 and $1.20
  • EBIT between $(29) million and $(22) million
  • EBITDA between $26 million and $38 million
  • Opening one new Gordmans off-price store, converting nine department stores to Gordmans off-price stores, and closing 30 to 40 department stores

As of August 23, 2018, the company operates in 42 states through 764 Bealls, Goody’s, Palais Royal, Peebles And Stage  specialty department stores and 63 Gordmans off-price stores, as well as an e-commerce website at www.stage.com.