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Saks Inc. posted wider-than-expected losses and weaker sales in the second quarter as well as $2.5 million in costs related to its pending buyout by Richard Baker’s Hudson’s Bay Co.
The luxe retailer is in the midst of a 40-day go-shop period in which it can try to find a bid to top the $16 a share offered by Baker, which values the company at $2.9 billion including debt.
Saks’ net loss widened to $19.6 million, or 13 cents a share, from $12.3 million, or 8 cents, a year earlier. Last quarter’s losses included the $2.5 million in expenses related to the merger as well as a $1.6 million pension settlement charge and $1.1 million in store closing costs. Excluding these items, losses would have tallied 10 cents a share, 2 cents steeper than the 8 cent loss analysts projected on average.
Sales for the three months ended Aug. 3 inched up 0.5 percent to $707.8 million from $704.1 million and behind the $732.6 million analysts projected. Comparable-store sales increased 1.5 percent. In May, the company said comps grew at 5.9 percent in the first quarter and projected they would range from gains of 4 percent to 6 percent for the balance of the year, with slighly higher growth in the back half.
“While the second quarter was our fourteenth consecutive quarter of posting a comparable-store sales increase, our sales growth was modestly below our expectations,” said Stephen I. Sadove, chairman and chief executive officer. “This shortfall contributed to our second quarter year-over-year gross margin rate decline and SG&A expense deleverage.”
Gross margins fell to 36.6 percent of sales, from 37.2 percent a year earlier.
The company stopped providing forward guidance and cancelled its quarterly conference call, scheduled for Tuesday.