Recent same-store sales trends at upscale department-store retailer Saks
Saks' first-quarter results, reported this morning, saw a nearly 16% total sales increase and impressive comps of 14.4%, following a 9.9% jump last quarter. Bottom-line earnings trends were more difficult to discern, since the company realized hefty gains in past quarters from the sale of lower-end department stores to Bon-Ton Stores
Forward guidance in the earnings press release helped clarify Saks' outlook, but management fell short of offering concrete earnings expectations. What we do know is that the company will continue to emphasize product mix by individual store, expand its more profitable private-label apparel and other brands, and right-size corporate expenses and related functions.
The above and other moves are projected to translate into 4% operating margins, low-double-digit second-quarter comps, mid- to high-single-digit fall comps, and slight gross margin improvements toward the end of the year.
The strong sales trends are nothing to sneeze at, but Saks still has work to do to convince investors its high-end ambitions will translate into industry-leading profitability and cash flow growth. As it stands, Dillard's
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.