Sandy weakens early Nov. sales at Saks
NEW YORK (AP) — The storm that ravaged much of the East Coast in November shuttered a number of Saks' locations and the luxury retailer now expects comparable-store sales will be flat during the critical holiday period.
Stores that account for 55 percent of the chains' revenue were effected by Superstorm Sandy, according to Chairman and CEO Stephen Sadove.
Saks Inc. said that 11 of its 45 Saks Fifth Avenue stores were closed from one to seven days because of Sandy. This includes its flagship store in New York, which was closed for two days. In addition, 15 of its 64 Off 5th stores were closed up to five days. None of the stores sustained material damage.
For the third quarter, Saks's net income rose 27 percent to $22.6 million, or 14 cents per share, from $17.8 million, or 11 cents per share.
The performance was helped by the reversal of about $3.3 million in federal income tax reserves no longer considered necessary.
Taking out this item, earnings were 12 cents per share, which is in line with Wall Street expectations, according to a poll by FactSet.
Revenue for the three months ended Oct. 27 increased 3 percent to $713.2 million from $692.3 million on strong sales of items such as handbags, fine jewelry, fragrances, women's and men's shoes and women's and men's contemporary clothing.
Wall Street expected revenue of $727 million.
Revenue at stores open at least a year climbed 3.3 percent, which was slower that the 5.8 percent rise that Saks posted in the prior-year period.
Gross margin declined mostly because of a modest increase in promotions.
Saks currently runs 45 Saks Fifth Avenue stores and 65 Saks Fifth Avenue Off 5TH stores.
Its stock fell 10 cents to $9.78 in premarket trading on Tuesday.