Stage Stores Inc. will close 90 underperforming stores in reaction to an 85.6 percent drop in second-quarter profits.
The closures represent 4 percent of total sales, the company said.
Michael Glazer, president and chief executive officer, said, “The closure of the stores should enhance our capital efficiency, deliver higher productivity and be accretive to earnings.”
Glazer said the company was challenged in the quarter by the “impact of a weaker peso and economic softness in parts of Texas, Louisiana, Oklahoma and New Mexico.”
For the three months ended Aug. 1, net income was $1.6 million, or 5 cents a diluted share, from $11.2 million, or 35 cents, a year ago. On an adjusted basis, excluding charges connected with the consolidation of company headquarters and store impairments, net income was $7 million, or 22 cents in the quarter. Net sales inched up 0.9 percent to $380.9 million from $377.4 million. Comparable-store sales rose 0.8 percent. Wall Street was expecting 34 cents, on an adjusted basis, on revenues of $384.6 million.
The company also lowered guidance for fiscal 2015, now projecting adjusted earnings per share in the range of $1.05 to $1.15 a diluted share. Prior guidance was a range of $1.20 to $1.28 a diluted share.
Glazer said headwinds faced in the first half of the year “are likely to extend to the remainder of the year.”