Saks Beats Second Quarter Earnings Expectations

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Last Update: 16-Aug-11 11:56 ET

Saks (SKS $8.80 -0.27) reported a second quarter loss of ($0.05) per share, $0.03 better than the Capital IQ Consensus Estimate of ($0.08).

Revenues rose 13.0% year/year to $670.2 million versus the $663.1 million consensus.

"Through the second quarter, our customers remained confident and continued to respond to our differentiated merchandise, service initiatives, and creative marketing. With the recent increased volatility and downturn in the financial markets and the overall uncertainty in the macroeconomic environment, we are approaching the fall season a bit more cautiously and will continue to be very strategic with our expense, capital, and inventory spending, making investments in areas with the most potential for profitable growth."

The company assumes the following for the balance of 2011: Comparable store sales growth in the mid-to-high single digit range in the second half of the fiscal year... Comparable store inventory levels are expected to be up in the mid-single digit range throughout the balance of the year... Based upon current inventory levels and the Company's promotional calendar and permanent markdown cadence, the Company expects a year-over-year gross margin rate increase of 40 to 70 basis points in the second half of the fiscal year, with more year-over-year improvement expected in the third quarter than in the fourth quarter. The Company's gross margin rate is typically higher in the first half than in the second half of the fiscal year.