US: Saks full year profits down on Hurricane Sandy
- Full year net income fell to US$62.9m
- FY sales increased 3.1% to $3.1bn
- Fourth quarter net income fell to $20.4m
- Q4 ales increased 1% to $934.6m
US upscale department store operator Saks Inc has admitted its full year results were below expectations as a result of macroeconomic concerns and Hurricane Sandy.
The comments came as full year net income fell to $62.9m over the year ended 2 February, down on the $72.4m recorded in the prior year. Sales increased 3.1% to $3.1bn, and were up 3.2% on a comparable basis.
"For the year, sales and earnings were below our initial expectations as continued macroeconomic concerns, election and fiscal cliff distractions, and Hurricane Sandy weighed on our results, particularly in the second half of the year," said chairman and CEO Stephen Sadove.
"Even though 2012 was a challenging year, it was also a year of meaningful progress and transformation for Saks.
"We continued to execute our core merchandising, service, and marketing strategies while building critically important omni-channel capabilities to position us for the future."
The company recorded net income of US$20.4m over the fourth quarter, against $37m in the same period of the prior year. Excluding one-off charges in both quarters, net income fell only slightly to $28.4m, from $29m last time.
Over the quarter, sales increased 1% to $934.6m, rising 0.7% on a comparable basis. Gross margin increased 10 basis points to 37.7% from 37.6% in the same period of the prior year.
"Our fourth quarter sales were negatively impacted by Hurricane Sandy which caused significant disruption to our very important north eastern markets and to saks.com," said Sadove.
"Several merchandise categories showed sales strength during the fourth quarter, including women's contemporary apparel, advanced European designer apparel, and shoes; men's contemporary apparel, shoes, and accessories; handbags; and fragrances. As expected, the New York City flagship store sales lagged the company-wide performance for the quarter, due in part to the impact of Hurricane Sandy."
Saks has seen its losses widen in the second quarter, after the upscale department store retailer was weighed down by higher costs and increased markdowns....
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