US: Saks books "solid" Q1 profit, sees slowing sales
- Q1 earnings jump 13% to $32.1m
- Revenues rose 3.8% to $753.6m
- Gross margin up 30 basis points to 44.4%
Luxury retailer Saks Incorporated today (15 May) said it made "solid progress" in its first quarter with a 13% jump in earnings, but added that slowing sales in areas like women's designer wear are weighing on profit margins.
"Our year-over-year earnings improvement was driven by a 4.8% comparable store sales increase, on top of a 10.2% comparable store sales increase in last year's first quarter, and continued gross margin rate improvement," noted chairman and CEO Stephen Sadove.
"While we continue to see overall growth in the business, certain areas experienced a deceleration in sales. Specifically, some categories within the women's ready-to-wear zone (such as women's designer apparel) did not meet our sales expectations, and consequently, we anticipate some incremental markdown pressure in the second quarter as we clear inventory and move through the normal clearance period.
"Additionally, we continue to experience meaningful sales growth in certain areas such as shoes, which is being driven by our strategic increase in the breadth and depth of our inventory assortments in these merchandise categories.
"As expected, these incremental investments are negatively affecting our gross margin rate."
The New York based company, which operates the Saks Fifth Avenue and Saks Off 5th stores, posted earnings of $32.1m or $0.18 per share, in the three months to 28 April. This compares with $28.4m or $0.16 per share last year.
Excluding costs relating to a new fulfilment centre and store closure, Saks would have earned $32.7m, or $0.19 per share, it said.
Revenues rose 3.8% to $753.6m - and a rise in full-price selling lifted gross margin rate by 30 basis points to 44.4%, up from 44.1% in last year's quarter.
Women's wear retailer Christopher & Banks has appointed former Payless ShoeSource chief executive LuAnn Via as its new president and CEO....
US fashion retailer Saks Inc has opened its first Saks Fifth Avenue store in Kazakhstan, as it tries to tap into the region's growing demand for luxury products....
US footwear and apparel company The Jones Group has appointed Kathy Nedorostek to the newly-created position of group president of global footwear and accessories....
US department store operator Saks has announced it will officially open its distribution and fulfilment facility in LaVergne, Tennessee on 7 September. ...
- Why voters don’t want more global supply chains
- Denim and athleisure top picks for back-to-school
- What's 3D-printing doing for apparel and footwear?
- Labelling – The importance of the fine print
- Global supply chain trends at Sourcing at MAGIC
- Myanmar textile association to lift garment makers
- US Q2 in brief - The Buckle, Stein Mart
- H&M takes action over Myanmar child labour breach
- Vietnam garment industry calls for strategy update
- Nike and Apollo create supply chain partnership
- Too Many Standards
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Under Armour, Inc. (UA) - Financial and Strategic SWOT Analysis Review
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- THE GAP, INC.: Retailing - Company Profile, SWOT & Financial Analysis