Stage Stores reports 32% increase in full year EPS

09 Mar '11

4 min read

Stage Stores Inc reported net income for the fourth quarter ended January 29, 2011 of $32.0 million versus $27.9 million for the prior year fourth quarter ended January 30, 2010. Diluted earnings per share for the quarter increased 19% to $0.86 this year from $0.72 last year.

For the 2010 fiscal year, the Company reported net income of $37.6 million versus $28.7 million for the 2009 fiscal year. Diluted earnings per share for the year increased 32% to $0.99 this year from $0.75 last year.

The Company also reported that it completed its $25 million Stock Repurchase Program during the fourth quarter. The Company repurchased approximately 0.3 million shares during the quarter. In total, the Company repurchased approximately 2.0 million shares under its $25 million Stock Repurchase Program.

Commenting on the Company's fourth quarter and full year results, Andy Hall, President and Chief Executive Officer, stated, “We are very pleased with our 19% increase in fourth quarter earnings per share. The improved EPS was primarily driven by a 5.1% increase in total sales coupled with a 130 basis point improvement in our gross profit rate.

“We are also very pleased with our 32% increase in earnings per share for the year. A 2.7% increase in total sales combined with a 90 basis point improvement in our gross profit rate accounted for most of the year-over-year improvement in EPS.

“We continued to make progress on our key growth initiatives during the year:

• Growth of the Goody's nameplate - we opened 33 new stores, 30 of which were opened under the Goody's name. We also rebranded 26 non-Goody's stores with the Goody's name. In all, we ended the year with 71 Goody's stores. We continue to be very pleased with the performance of both our new and rebranded Goody's stores.
• Markdown optimization – we began the roll-out of our markdown optimization tool and expect to be completed in early spring 2011.
• eCommerce - we successfully launched our eCommerce platform in the fourth quarter. The initial customer interest and sales activity exceeded our expectations.
• Shareholder value - we increased our quarterly dividend rate by 50% and completed our $25 million stock repurchase program.”

Mr. Hall concluded, “We are proud of our associates and their many achievements this year. We have momentum as we embark on 2011 and we have confidence in our ability to meet our 2011 objective of continued growth.”

The Company announced that its Board of Directors has approved a new Stock Repurchase Program which authorizes the Company to repurchase up to $200 million of its outstanding common stock.

Commenting on the Company's new $200 million Stock Repurchase Program, Mr. Hall stated, “Our strong balance sheet and cash flow allow us to undertake a significant new stock repurchase program. The $200 million authorization represents approximately one third of our current market value. Our intention is to repurchase up to $100 million of our shares during 2011 and to complete the program by the end of 2013. Our new stock repurchase program is consistent with our philosophy of deploying capital in a way that benefits our shareholders. The announcement reflects the strength of our business model and reaffirms our confidence and optimism in the long term future of our company.”

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