First-quarter results released by three retailers Thursday added more evidence the ongoing recession has been far easier on off-price firms than their department store counterparts.
Bargain-hungry shoppers helped Ross Stores Inc., the nation’s second largest off-price retailer behind The TJX Cos. Inc., boost both sales and profits in the quarter. However, the pricier — albeit increasingly promotional — department store sector saw two of its occupants, The Bon-Ton Stores Inc. and Stage Stores Inc., check in with losses that came, respectively, against a smaller loss and a profit a year ago.
The Pleasanton, Calif.-based Ross said net income grew 15 percent to $91.4 million, or 72 cents a diluted share, while sales advanced 8.7 percent to $1.69 billion on a 3 percent comp boost. The results matched consensus estimates.
Michael Balmuth, president and chief executive officer, said, “Our business benefited mainly from our ability to offer customers fresh and exciting namebrand bargains, as we continue to take advantage of the substantial amount of close-out opportunities in the marketplace.”
Full-year EPS guidance was lifted to $2.62 to $2.72, up from the previous range of $2.25 to $2.45, helping the firm’s shares rise 8.1 percent to $38.71 in Nasdaq trading Thursday.
At Bon-Ton, a smaller tax benefit widened the first-quarter loss to $45.4 million, or $2.67 a share, from a loss of $34.1 million, or $2.03, a year ago. Total revenues decreased 8.3 percent to $662.9 million from $723 million. Included in revenues were an 8 percent decline in sales to $644.5 million and a 19.2 percent drop in other income primarily from its proprietary credit card operation. Comparable-store sales were down 8.6 percent.
Bud Bergren, president and ceo, said the retailer reduced its comparable-store and clearance inventories by 11 percent and 16 percent, respectively, and had a net reduction of $18.9 million in selling, general and administrative expenses.
“The combined efforts delivered an improvement in our operating results,” he said. “In addition, our excess borrowing capacity under our credit facility was $165 million at the end of the first quarter, well above the $75 million minimum availability covenant under our credit facility,” he said.
Bon-Ton’s operating loss in the quarter fell to $23.6 million from $25.5 million a year ago.
The firm maintained its full-year 2009 guidance of a loss per diluted share of $3.40 to $4.30. Its shares fell 6.7 percent to $3.91 in Nasdaq trading Thursday.
Stage Stores posted a first-quarter loss of $905,000, or 2 cents a share, 1 cent better than analysts had estimated. In last year’s quarter, the Houston-based department store retailer logged net income of $2.3 million, or 6 cents.
Sales fell 5.6 percent to $333.6 million and were down 9 percent on a same-store basis.
The firm projected comparable-store sales declines of 6 to 9 percent for the second quarter and 5.5 to 8 percent for the year. Andy Hall, president and ceo, said, “We do not expect a change in the macroeconomic conditions for the balance of 2009.”
However, he raised the low end of full-year earnings estimates to 40 cents a diluted share, although the company maintained the high end at 65 cents. The previous low range estimate was 35 cents.
For the second quarter, the diluted EPS estimate is 20 to 27 cents.
Stage’s shares closed up 2.6 percent to $11.85 on Thursday.
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