Saks Misses Analysts' Mark for Second-Quarter Earnings

Saks Fifth Avenue (UNKNOWN: SKS.DL2  ) is the latest retailer to let down investors after posting disappointing quarterly results. The upscale department store operator reported a second-quarter loss that was wider than Wall Street expected, as costs mounted and sales faltered. However, Saks didn't blame its shortcomings on the consumer like so many other retailers did.

Trending down
Sales rose a meager 0.5% to $707.8 million for Saks' last quarter as a publicly traded company. Analysts were looking for revenue of $732.3 million. This translated into a loss of $19.6 million or $0.13 per share, compared to a loss of $12.3 million or $0.08 a share in the year-ago period  However, excluding certain charges such as $2.5 million in costs related to the retailer's pending merger with Canadian-based Hudson's Bay, the per-share loss would be $0.10.

While other department store chains including Macy's (NYSE: M  ) and Nordstrom  (NYSE: JWN  ) blamed weak sales on the consumer, Saks held itself accountable. Saks said higher year-over-year markdowns of men's and women's shoes hurt margins in the quarter, while sales were negatively affected by a late start to the company's annual end-of-spring sales event.

Let's see how Saks' second-quarter earnings measure up to rival department store stocks.

Company

EPS

Same-store sales growth

Saks  

($0.13)

1.5%

Macy's  

$0.72

(0.8%)

Nordstrom  

$0.93

4.4%

Ouch. It wasn't a flattering second quarter for any of these department stores. In fact, both Macy's and Nordstrom reduced their full-year outlooks due to the challenging retail environment. Macy's now expects same-store sales growth of between 2% and 2.9% for fiscal 2013, down from 3.5%. Meanwhile, Nordstrom now expects comps to increase just 2% to 3% on the year, below its previous prediction of 3% to 5% growth.

Saks, on the other hand, didn't provide guidance since it agreed to be purchased by Hudson's Bay for $16 a share last month. The deal, which is valued at $2.9 billion including debt, is expected to close before the end of the year, according to Saks.

It has been a tough earnings season for retail stocks.

However, not all retailers are created equal. Find out which retail stocks are rewarding investors in this special free report:  "3 Companies Ready to Rule Retail." Uncovering these top picks is free today, but it won't be around forever so click here while it's still available.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2600880, ~/Articles/ArticleHandler.aspx, 7/30/2014 4:23:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement