Seeing the results of turnaround efforts, Saks Inc. reversed its fourth-quarter fortunes, moving into the black from a loss last year.
The luxury retailer reported Wednesday that net income for the fourth quarter increased to $21.5 million, or 14 cents per share, compared with a loss of $2.2 million or 2 cents per share in the year-ago period.
The company also reported same-store sales gained 9.9 percent in the last quarter and 24.7 percent during February.
“We are pleased with the significant increase in operating income for the quarter which was driven by strong comparable store sales, substantial improvement in the gross margin rate, and solid expense management,” Stephen Sadove, Saks’ chief executive officer, said in a statement.
“Our fourth quarter comparable store sales increase of 9.9 percent and gross margin rate improvement of 430 basis points indicate that we have made much progress on understanding our core customer by market and on refining our merchandise assortments in each of our stores.,'' he continued. Our sell-throughs of full-priced merchandise have improved significantly, and our customer service, clienteling, and marketing efforts continue to improve.”
Sadove said later in a conference call that the Saks Fifth Avenue was only about one-third of the way through its turnaround and that it had a long way to go to catch to the profit margins of industry leaders. Neiman Marcus and Nordstrom both post double-digit profit margins, while Saks remains in the mid-single digit range.
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