Stage Stores Inc. registered among the biggest earnings “misses” of the second-quarter retail cycle and brought down its full-year estimates.
Shares slid $1.02, or 5.5 percent, to $17.48 in midday trading Thursday on the New York Stock Exchange and hit a 52-week low of $17.19 earlier in the day.
For the three months ended Aug. 2, the Houston-based operator of the Stage, Bealls, Goody’s, Palais Royal and Peebles nameplates reported net income of $11.2 million, or 35 cents a diluted share. This was 16.5 percent higher than the $9.6 million, or 29 cents, registered in the 2013 quarter, when it incurred charges for discontinued operations, but was 17 cents below the consensus estimate of analysts of 52 cents. Sales also fell short of estimates, retreating 3.2 percent to $377.4 million from $390 million and more than $20 million below the consensus estimate of $397.6 million. Comparable-store sales fell 4.2 percent while gross margin grew to 29.8 percent of sales from 29.6 percent in the year-ago period.
“We found the second quarter to be challenging, but we were encouraged that our sales trend improved towards the end of the quarter,” said Michael Glazer, president and chief executive officer. “We were pleased with the performance of our back-to-school categories as well as cosmetics, which delivered another strong quarterly performance.”
He said the positive momentum seen in the final two weeks of July “has continued into August” and that inventories, up 2.1 percent from year-ago levels overall, were flat on a comparable-store basis.
Glazer said initiatives to drive sales — including a new fixture program, additional space and brands in cosmetics and an effort to upgrade the stores’ home assortments — are expected to help results in the back half of the year, as will an upgrade of the firm’s e-commerce efforts.
While reiterating its expectations for full-year comps that are expected to be flat to up 2 percent, Stage brought down its earnings per share to $1.05 to $1.15 from earlier guidance of $1.25 to $1.35. Revenues, originally projected to hit $1.64 billion to $1.67 billion, are estimated to finish the year at between $1.61 billion and $1.625 billion.
Year-to-date, Stage recorded a net loss of $7.6 million, or 24 cents a diluted share, versus net income of $2.8 million, or 8 cents, in the first six months of 2013. Revenues dropped 1.7 percent to $749.5 million from $762.1 million. Stage incurred charges for discontinued operations for both periods.
@deciem is all about transparency and approachability. At this year’s WWD Digital Beauty Forum, the brand's co-CEO @nicolakilner said talking to customers directly about the ingredients in products and how they work is key. #wwdsummits #wwdbeauty
‘We didn't know how relevant our film would be when we were making it. When Steven [Rogers] wrote the script Trump wasn't president, class divide in America wasn't as evident as it is now, though it was present. The Time’s Up movement hadn't began and the way we look at women and treat women who speak out — thankfully that is something that seems to have shifted in the last year. I think we just need to continue making art that provokes the conversation and do what we can,’ said ‘I, Tonya’ actress @margotrobbie. Head to WWD.com to see all the celebrities who walked the red carpet @bafta #timesup #wwdeye (📸: Neil Hall)
Gemma Arterton is joined on the @bafta’s red carpet by Eileen Pullen and Gwen Davis, the two women who started the fight for the pay-gap. ‘They represent a normal person speaking out for what is right. Speak out, we will listen and anyone can speak out,’ said Arterton. #eebaftas #timesup #wwdeye (📸: David Fisher)