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Saks First-Quarter Same-Store Sales Beat Estimates

Carolina Herrera in Saks 5th Avenue Campaign | Saks 5th Avenue
By
  • Reuters

NEW YORK, United States — Saks Inc on Tuesday reported higher-than-expected first-quarter sales but said investments to launch an e-commerce site for its outlet chain would weigh more on profits than expected.

Sales at stores open at least a year rose 5.9 percent, while analysts were expecting a 2.6 percent increase, according to Thomson Reuters I/B/E/S. Sales at its famed Fifth Avenue flagship in New York, which generates one-fifth of sales, rose at a more modest pace, the company said.

Overall sales came to $793.2 million, above the $776.80 million Wall Street had forecast. Shares were up 2.2 percent to $12.55 in premarket trading. The luxury chain said same-store sales for the balance of the year should be up 4 percent to 6 percent.

Saks is in the midst of a multi-year $95 million effort to improve its computer systems to improve online sales and catch department store rivals Nordstrom Inc and Macy's Inc. Those chains have been able to use their stores to fulfill online orders thanks to their information technology investments, a boon for both.

Saks already offers online shopping for its full-service department store chain, but said on Tuesday it was moving up the launch of an e-commerce site for its Saks Off Fifth chain to the fall of 2013 from a launch planned for 2014. That will cost Saks up to $6 million more.

Rival Nordstrom and Neiman Marcus have long offered e-commerce for their respective outlet chains of lower priced merchandise.

Saks reported a profit of $20 million, or 13 cents per share, for the quarter ended May 4, versus a year-earlier profit of $32.1 million, or 18 cents per share. Excluding one-time items, Saks had a profit of 19 cents per share, in line with Wall Street estimates.

Copyright (2013) Thomson Reuters. Click for restrictions

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