Comparable store sales declined 4.8% in the fourth quarter, in line with the Company's expectations. For the full fiscal year, comparable store sales fell 14.7%.
In the Saks Fifth Avenue stores, several merchandise categories showed relative strength during the fourth quarter, including women's designer sportswear, handbags, shoes, and jewelry. For the quarter, sales trends in the New York City flagship store were better than the Company's aggregate comparable store sales performance, a meaningful improvement from trends experienced earlier in 2009.
Saks Direct posted an approximate 23% comparable store sales increase in the quarter and an approximate 13% increase on a year-to-date basis. OFF 5TH's comparable store sales performance showed relative strength during the quarter and full year.
The Company generated substantial year-over-year gross margin rate improvement in the fourth quarter, up 1,530 basis points to 36.5% this year from 21.2% in last year's fourth quarter. The improvement exceeded management's expectations and resulted from controlled inventory levels and a disciplined promotional and clearance cadence. For the full fiscal year, the gross margin rate was 36.6% in 2009 versus 32.2% in the prior year.
Sadove commented, "Managing Selling, General, and Administrative expenses ("SG&A") continues to be a key focus for the Company. For the fourth quarter, we expected year-over-year SG&A dollars (excluding certain items) to be approximately flat; however, we were able to reduce SG&A by approximately $8.7 million for the period." The Company achieved SG&A leverage in the fourth quarter in spite of the comparable store sales decline. As a percent of sales, SG&A (excluding certain items) was 23.5% in the current fourth quarter compared to 23.7% in last year's fourth quarter. For the full 2009 fiscal year, the Company delivered a flat year-over-year SG&A rate (excluding certain items) of 25.4%, even though comparable store sales declined 14.7%. Excluding certain items, the Company reduced SG&A by approximately $105 million for the fiscal year and by approximately $155 million over the last six quarters.
In spite of the sales decline, the Company's operating margin (excluding certain items) expanded to 3.6% in the quarter from a 12.2% operating loss in the prior year fourth quarter. For the full fiscal year (excluding certain items), the Company narrowed its operating loss to 0.8% from 3.7% in 2008.
20240830145952.gif)
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
