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Saks Direct & OFF 5TH to post outsized sales growth for Q2
19 Aug '08
4 min read
Sadove continued, "During the quarter, we experienced a softening across nearly all geographies and merchandise categories, although generally the better performing geographies and categories in prior quarters were still the better performing areas in the second quarter.
Some of the strongest merchandise categories for Saks Fifth Avenue during the quarter included shoes; jewelry; accessories; and men's contemporary apparel, shoes, and accessories. We experienced widespread weakness in women's apparel. The New York City flagship store continued to outperform the company average, and certain of the Company's newly-renovated stores continued to post better-than-average results."
Both Saks Direct and Saks Fifth Avenue OFF 5TH ("OFF 5TH") continued to post outsized sales growth for the quarter. Saks Direct revenues grew over 30% for the second quarter on top of last year's 40% second quarter growth.
The Company's gross margin rate declined by 60 basis points in the quarter. Second quarter year-over-year SG&A expense (excluding certain items) increased 140 basis points as a percent of sales, and Other Operating Expenses (depreciation, rents, and taxes other than income taxes) increased 60 basis points as a percent of sales for the period. The comparable store sales decline was the principal driver of the expense deleverage during the quarter.
The previously noted spring season clearance event shift not only impacted sales but other components of the income statement as well. Absent the event shift, management estimates that the second quarter gross margin rate would have declined by approximately 240 basis points, second quarter SG&A expense (excluding certain items) would have increased by approximately 50 basis points, and Other Operating Expenses would have been relatively flat as a percent of sales.
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Some of the strongest merchandise categories for Saks Fifth Avenue during the quarter included shoes; jewelry; accessories; and men's contemporary apparel, shoes, and accessories. We experienced widespread weakness in women's apparel. The New York City flagship store continued to outperform the company average, and certain of the Company's newly-renovated stores continued to post better-than-average results."
Both Saks Direct and Saks Fifth Avenue OFF 5TH ("OFF 5TH") continued to post outsized sales growth for the quarter. Saks Direct revenues grew over 30% for the second quarter on top of last year's 40% second quarter growth.
The Company's gross margin rate declined by 60 basis points in the quarter. Second quarter year-over-year SG&A expense (excluding certain items) increased 140 basis points as a percent of sales, and Other Operating Expenses (depreciation, rents, and taxes other than income taxes) increased 60 basis points as a percent of sales for the period. The comparable store sales decline was the principal driver of the expense deleverage during the quarter.
The previously noted spring season clearance event shift not only impacted sales but other components of the income statement as well. Absent the event shift, management estimates that the second quarter gross margin rate would have declined by approximately 240 basis points, second quarter SG&A expense (excluding certain items) would have increased by approximately 50 basis points, and Other Operating Expenses would have been relatively flat as a percent of sales.
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Saks Incorporated
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