NEW YORK, United States — Saks Inc. on Monday reported a deeper than expected second-quarter loss after disappointing sales of shoes and handbags forced the luxury retailer to mark down prices.
Saks, which last month reached a deal to be bought by Canada’s Hudson’s Bay Co, reported same-store sales rose 1.5 percent, well below the 4.5 percent rise Wall Street analysts had expected. Saks becomes the latest U.S. retailer across the price spectrum to report mediocre sales: last week Macy’s Inc, Nordstrom Inc, Kohl’s Corp and Wal-Mart Stores Inc all reported lower than expected sales.
Overall sales rose 0.5 percent to $707.8 million for the quarter.
Saks was scheduled to report its earnings on Tuesday. The company said it will not hold its regularly scheduled call because of its pending acquisition by Hudson’s Bay. Saks’ gross margin fell because it had built up too much inventory of men’s and women’s shoes and handbags and had to slash prices to clear unsold merchandise.
For the quarter ended August 3, Saks had a net loss of $19.6 million, or 13 cents a share, compared with a net loss of $12.3 million, or 8 cents a share, a year earlier. Excluding costs including expenses related to store closings and the Hudson’s Bay deal, Saks lost 10 cents per share, 2 cents worse than expected.
Reporting by Phil Wahba in New York; Editing by Gerald E. McCormick; Copyright (2013) Thomson Reuters