Saks Inc. (NYSE: SKS) reported first-quarter fiscal 2013 results before markets opened this morning. The luxury department store chain posted adjusted diluted earnings per share (EPS) of $0.19 and $793.2 million in revenues. In the same period a year ago, Saks reported EPS of $0.19 on revenue of $753.61 million. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.19 and $778.53 million in revenue.
On a GAAP basis, the company posted EPS of $0.13, which included store closing costs and a noncash loss on early extinguishment of debt.
In its guidance statement, Saks increased its estimate of SG&A expenses by $5 million to $6 million and another $5 million to $6 million associated with the start-up of its OFF5TH ecommerce project. The store expects same-store sales growth of 4% to 6% for the remainder of the year. In the first quarter, Saks posted same-store sales growth of 5.9%, much better than the 2.6% consensus estimate.
Gross margins are forecast to be relatively flat for the rest of the year. Gross margins in the first quarter came in at 44.4%, flat with the same period a year ago.
The company’s chairman/CEO said:
Several merchandise categories showed sales strength during the first quarter, including women’s contemporary and advanced designer apparel; dresses; women’s shoes; handbags; children’s apparel; and men’s accessories, shoes, and contemporary apparel. The New York City flagship store sales performance was positive but modestly below the comparable store sales increase of the Company’s Saks Fifth Avenue stores in the aggregate for the quarter.
Saks performed just well enough in the first quarter to cheer up investors. The company’s outlook is a bit more muddled and a lot of things have to go right in order for the store to perform as expected. Still, today should see an uptick in the share price.
Shares are up 3.4% in premarket trading, at $12.70, a new 52-week high if it holds. The current 52-week range is $9.24 to $12.35, and the high was set yesterday. Thomson Reuters had a consensus analyst price target of around $11.50 before today’s results were announced.