Saks Direct & OFF 5TH to post outsized sales growth for Q2

19 Aug '08

4 min read

Retailer Saks Incorporated announced results for the second quarter and six months ended August 2, 2008.

Overview of Results for the Second Quarter and Six Months:
Saks recorded a net loss of $31.7 million, or $.23 per share, for the second quarter ended August 2, 2008. The second quarter included the following after-tax items totaling $1.0 million, or $0.01 per share:

• $0.8 million related to asset impairments and dispositions (primarily the Saks Fifth Avenue Ft. Lauderdale store closing) and
• expenses of approximately $0.2 million for severance costs related to the Ft. Lauderdale store closing.
For the prior year second quarter ended August 4, 2007, the Company recorded a net loss of $24.6 million, or $.17 per share. The prior year second quarter included the following after-tax items totaling $4.3 million, or $.03 per share:
• expenses of approximately $2.0 million for retention, severance, and transition costs related to the Company's downsizing and consolidation following the disposition of its Saks Department Store Group (SDSG) businesses,
• $2.0 million related to asset impairments and dispositions, and
• a loss on extinguishment of debt totaling $0.2 million related to the repurchase of $10.4 million of senior notes.

For the six months ended August 2, 2008, Saks recorded a net loss of $13.4 million, or $.10 per share. The six months included the following after-tax items totaling $1.0 million, or $0.01 per share:
• $0.8 million related to asset impairments and dispositions (primarily the Saks Fifth Avenue Ft. Lauderdale store closing) and
• expenses of approximately $0.2 million for severance costs related to the Ft. Lauderdale store closing.

For the prior year six months ended August 4, 2007, the Company recorded a net loss of $13.6 million, or $.10 per share. The prior year six months included the following after-tax items totaling $22.2 million, or $.16 per share:
• expenses of approximately $15.6 million for retention, severance, and transition costs,
• a loss on extinguishment of debt totaling $3.4 million related to the repurchase of $106.3 million of senior notes,
• $2.2 million related to asset impairments and dispositions, and
• expenses of approximately $1.0 million associated with the previously disclosed investigations.

Comments on the Second Quarter and Six Months Ended August 2, 2008:
Stephen I. Sadove, Chairman and Chief Executive Officer of the Company, noted, "While business became much more challenging in the second quarter, I believe our organization has responded well to the changing environment.

"Comparable store sales for the second quarter would have been slightly positive excluding the shift of a spring season clearance event into the first quarter this year from the second quarter last year. Comparable store sales for the spring season increased 2.7%.

While substantially slower than the robust growth we had experienced over the last two years, this performance was still among the best in the industry. In addition, we have made substantial progress in reducing our inventory levels from where they were at the beginning of the fiscal year."

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