Tight inventory controls and cost cutting helped department store Stage Stores Inc. deliver a 9.9 percent improvement in fourth-quarter profit despite waning sales.
For the 13 weeks ended Jan. 30, the Houston-based retailer registered net income of $27.9 million, or 72 cents a diluted share, compared with income of $25.3 million, or 67 cents a share, in the year-ago period. Excluding a noncash goodwill impairment charge, last year’s net income totaled $29.8 million, or 77 cents a share.
Fourth-quarter revenue slid 5.3 percent, to $431.7 million from $455.8 million in the prior-year quarter, as same-store sales fell 6.5 percent. Analysts polled by Yahoo Finance expected earnings per share of 69 cents on sales of $432.2 million.
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Quarterly gross margin, which benefited from lower clearance levels, reduced freight expense and improved physical inventory results, increased to 30.9 percent of sales from 29.1 percent a year earlier. Selling, general and administrative costs declined $2.1 million to $87.9 million, despite the company operating 19 additional stores, many of them operated under the Goody’s banner purchased at a July bankruptcy auction.
In 2009, Stage swung to a net profit of $28.7 million, or 75 cents a diluted share, versus a year-ago net loss of $65.5 million, or $1.71. Sales decreased 5.5 percent to $1.43 billion, from $1.52 billion.
“While we believe 2010 will be another challenging year with high unemployment, a cautious consumer and an elevated personal savings rate, we believe there will be less uncertainty than 2009,” president and chief executive officer Andy Hall said on a conference call. “As such, our 2010 operating mind-set has changed and we will play more offense that we believe will result in sales growth, operating margin expansion and an increase in EPS of between 6 and 20 percent.”
The company said it expects first-quarter results to range from a 2 cent loss to a 2 cent profit, while sales are anticipated to be between $332 million and $339 million. For 2010, Stage forecasted EPS of between 80 cents and 90 cents, on revenue in the range of $1.44 billion and $1.47 billion.
The ceo said the retailer plans to open 30 to 35 stores during the year. Stage said 15 to 20 of the stores will be Goody’s nameplates in former Goody’s markets.