Stage Stores, Inc. reported financial results for the fourth quarter and fiscal year ended February 2, 2013. For the 2012 fiscal year, the Company reported adjusted earnings, excluding one-time items, of $42.6 million, or $1.33 per diluted share. This compares to earnings of $31.0 million, or $0.92 per diluted share, in fiscal 2011.
Financial highlights for FY 2012:
Total sales increased 8.9% to $1,646 million. FY 2012 had 53 weeks while FY 2011 had 52 weeks. The 53rd week in FY 2012 added $16 million to total sales. On a 52 week basis, comparable store sales increased 5.7%.
Direct-To-Consumer sales increased 65% versus the prior year. Direct-To-Consumer sales positively impacted the Company’s same store sales by 0.5% in FY 2012.
Adjusted gross profit, as a percentage of net sales, improved by 90 basis points compared with FY 2011. The adjusted merchandise margin rate improved 20 basis points due to lower markdowns, while buying, occupancy and distribution costs improved 70 basis points due to leverage from higher sales.
Adjusted selling, general and administrative expenses, as a percentage of net sales, increased by 20 basis points over FY 2011. Leverage in store expenses and an improved benefit from the Company’s private label credit card program were offset by an increase in incentive compensation costs.
Adjusted earnings per diluted share increased 45% to $1.33 over last year. Including the one-time items, EPS was $1.19. Adjusted net income was $42.6 million, a 37% increase compared to $31.0 million for last year. Including the one-time items, net income was $38.2 million. Diluted average shares outstanding for FY 2012 were 31.6 million compared to 33.3 million for FY 2011.
“2012 was a phenomenal year for Stage Stores and one that all of our shareholders and associates can be extremely proud of,” stated Michael Glazer, President and Chief Executive Officer. “We achieved strong gains in sales and earnings and made significant progress on our strategic initiatives. Total sales exceeded $1.6 billion and we achieved a 5.7% increase in comparable store sales, the highest percentage increase in over 10 years. Driven by our record sales, adjusted earnings per share increased by 45% to a record $1.33.”
New store growth included 25 traditional stores and 31 Steele’s stores during the year. Direct-To-Consumer sales increased 65% over last year. A new loyalty program with enhanced cardholder benefits was introduced and new cards were reissued to more than 2 million customers. Consistent with the Company’s intent to increase distributions to its shareholders, Stage Stores quarterly dividend rate was increased by 11%.
As the Company noted in its news release on February 11, 2013, it started the process of consolidating its department store operations into its Houston corporate headquarters. The Company expects the consolidation to increase efficiency, create synergies and enhance purchasing power and sales growth. The Company projects annual savings from the consolidation to be approximately $5 million.