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Saks Inc.’s first-quarter profits were impacted by after-tax items, but sales and comps both rose in the period.
For the three months ended May 4, net income dropped 37.8 percent to $20 million, or 13 cents a diluted share, from $32.1 million, or 18 cents, a year ago. Excluding $10.1 million in after-tax items for store closing costs and a non-cash loss on the extinguishment of debt in connection to the retailer’s redemption of its $230 million convertible senior notes, the company would have posted net income of $30.1 million, or 19 cents, for the quarter. Net sales rose 5.3 percent to $793.2 million from $753.6 million, with comparable-store sales up 5.9 percent on top of the 4.8 percent increase in the year-ago quarter.
Stephen I. Sadove, chairman and chief executive officer, said, “Several merchandise categories showed sales strength during the first quarter, including women’s contemporary and advanced designer apparel; dresses; women’s shoes; handbags; children’s apparel, and men’s accessories, shoes, and contemporary apparel.”
He noted the company maintained a “44.4 percent gross margin rate, which was flat with last year, in an increasingly promotional environment.”