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Saks Net Falls, Hurt by Sandy

Luxe retailer’s comp sales inched up 0.7 percent in holiday quarter.

Saks Inc.’s net profits fell sharply in the fourth quarter as Hurricane Sandy disrupted Northeastern markets, although earnings were flat on an adjusted basis and comparable-store sales inched up.

Fourth-quarter net income declined 44.7 percent to $20.4 million, or 13 cents a diluted share, from $37 million, or 21 cents, a year earlier. Excluding special items in both periods, earnings were flat at 17 cents a share — 2 cents higher than the 15 cents analysts projected.

Shares of Saks advanced 0.8 percent to $11.13 in the opening minutes of trading on Wall Street.

 

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Revenues for the 14 weeks ended Feb. 2 rose 5.6 percent to $976.6 million from $925.1 million. The most-recent quarter was one week longer than the year-ago period and helped make results look better. Comp sales, which strip away that extra week, increased 0.7 percent for the quarter.

Stephen Sadove, chairman and chief executive officer, noted that the comp gain came on top of a 7.7 percent comp rise a year earlier.

“Our fourth-quarter sales were negatively impacted by Hurricane Sandy which caused significant disruption to our very important Northeastern markets and to saks.com,” Sadove said. “Several merchandise categories showed sales strength during the fourth quarter, including women’s contemporary apparel, advanced European designer apparel, and shoes; men’s contemporary apparel, shoes, and accessories; handbags, and fragrances. As expected, the New York City flagship store sales lagged the company-wide performance for the quarter, due in part to the impact of Hurricane Sandy.”

For the full year, Saks’ net income fell 15.9 percent to $62.9 million, or 41 cents a share, from $74.8 million, or 45 cents, in the prior year. Revenues increased 4.4 percent to $3.15 billion from $3.01 billion.
Sadove said the company could continue to bring together its store and online operations this year.

“We view 2013 as another transformational year in which we will further enhance our omnichannel capabilities,” the ceo said.

 

 “As we look ahead to 2013, we expect the external environment to remain somewhat volatile,” he added. “There are several macro factors, such as higher tax rates on the more affluent and the unknown resolution of pending fiscal matters that could create additional uncertainty, particularly in the first half of the year.”

In 2013, the company expects its comp sales to grow by 3 percent to 5 percent.