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NEW YORK (AP) — Luxury retailer Saks Inc. reports its fiscal second-quarter results before the regular markets open Tuesday. The numbers should give insight into the strength of the luxury sector and whether the financial crisis in Europe is hurting the retailer's tourist business.
WHAT TO WATCH FOR: Like many luxury stores, Saks has seen its affluent shoppers return to spending freely on status goods since the recession. But the volatility in the stock market and the financial crisis in Europe are creating challenges for Saks. After reporting its first-quarter results in May, company executives said they were adding extra discounts to lure shoppers in.
Investors on Tuesday will be looking for signs on how much Saks had to promote to get shoppers in the store and will also be looking for commentary on its strategies to attract the well-heeled in the critical months of the year.
Saks said earlier this month that revenue at stores open at least a year rose 3.5 percent over the four weeks ended July 28. Analysts expected growth of 4 percent, according to Thomson Reuters. Its strongest categories for the month included women's contemporary and designer clothing, men's accessories, shoes, and contemporary apparel, fashion and fine jewelry, handbags, and cosmetic and fragrances, according to Saks. A one-day electronic gift card promotion also boosted its sales.
Revenue at stores open at least a year is considered an important measurement of retailer health because they leave out results from locations that have opened or closed within the last year.
For the quarter, revenue at stores opened at least a year climbed 4.7 percent.
WHY IT MATTERS: Saks, based in New York, is considered a barometer of luxury spending. Investors and others are watching whether growth in that sector will continue. That would be a good sign for the economic recovery because affluent shoppers have helped to prop up overall spending.
WHAT'S EXPECTED: Saks is expected to post a loss of 9 cents per share on revenue of $705 million.
LAST'S YEAR'S QUARTER: Saks lost 5 cents per share on revenue of $670 million.