Stage Stores’s Q3 Comps Slump

The company noted that cosmetics, accessories and footwear were its best performing categories during the quarter. Geographically, the South Central and Northeast regions performed better than the company average.

The company reported an adjusted net loss for the third quarter, excluding one-time items, of 26 cents per share. This compares to an adjusted net loss of 25 cents per share last year.

“We were pleased with our strong gross profit rate for the quarter, which resulted in an adjusted net loss per share that was in-line with last year,” said Michael Glazer, President and Chief ExecutivCe Officer. “Our comparable store sales improved sequentially each month during the quarter, but significantly lower clearance sales versus last year led to an overall comp decline. Excluding clearance sales from both years, our comparable store sales were positive for the quarter.

“With regard to the consolidation, the merchandise assortments in our former South Hill division stores are now essentially aligned with the rest of the chain. As a result, the comparable store sales gap that we saw in the second quarter between these stores and our Houston division stores closed materially during the third quarter.”

Mr. Glazer continued, “As part of our ongoing efforts to become more productive and improve our profitability, we implemented an expense reduction program in early November. These cost cutting measures, which included the elimination of approximately 50 corporate positions, are estimated to save $5 million annually.

“Looking ahead, we have strong marketing campaigns and in-store initiatives planned for the fourth quarter, including holiday offers that are even more exciting and compelling than last year. Our stores will be open on Thanksgiving night from 6:00 p.m. to 1:00 a.m. for our biggest ever Thanksgiving event, and will then reopen at 6:00 a.m. on Black Friday with continued door busters, deals and prizes.

“While we feel good about our holiday plans, given the current challenging sales environment for apparel retailers, we are projecting comparable store sales for the fourth quarter to be in a range of down 2 percent to flat. We are also projecting adjusted earnings for the year of between $1.20 and $1.30 per diluted share,” Mr. Glazer concluded.

Reported Earnings

Including one-time items, the company reported a net loss for the third quarter of $11.0 million, or $0.34 per share, this year compared to a net loss of $8.9 million, or $0.28 per share, last year. One-time items recorded in this year’s third quarter, which total approximately $4.4 million, or $0.08 per share, are associated with the consolidation of the company’s South Hill, Virginia operations into its Houston headquarters. One-time items recorded in last year’s third quarter, which total approximately $1.4 million, or $0.03 per share, are also associated with the South Hill consolidation. For the first three quarters of the fiscal year, the company reported a net loss of $8.2 million, or $0.25 per share, this year compared to earnings of $2.4 million, or $0.08 per diluted share, last year. One-time items total approximately $20.5 million, or $0.39 per share, this year versus approximately $4.4 million, or $0.09 per share, last year.

FY 2013 Guidance

The company revised its comparable store sales guidance range for the full year to (1.1) percent – (0.5) percent, which assumes comps of between (2.0) percent and flat for the fourth quarter. The company also revised its adjusted EPS guidance range for the year, excluding one-time items, to $1.20 – $1.30 from $1.30 – $1.40 previously. The one-time items are associated with the consolidation of the company’s South Hill operations into its Houston headquarters and are estimated to be approximately $22.3 million, or $0.43 per diluted share, for the year.