US: Saks Q2 losses widen to US$19.6m
- Q2 losses widened to $19.6m from $12.3m
- Sales edged up 0.5% to $707.8m
- Gross margin slipped to 36.6% versus 37.2%
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.
The company, which last month agreed to a US$2.9bn buyout by Canadian retailer Hudson's Bay Company, said net losses were $19.6m for the three months to 3 August, compared to losses of $12.3m in the same period last year.
This included $5.2m in after-tax charges, comprising $1.1m in store closing costs, a $1.6m non-cash pension settlement charge and $2.5m in expenses related to its merger with Hudson's Bay Company.
Excluding these costs, net losses stood at $14.4m.
Sales edged up 0.5% to $707.8m from $704.1m in the prior year, while comparable store sales climbed 1.5%. Gross margin slipped to 36.6% from 37.2%, due to higher levels of markdowns in men's, women's shoes, and handbags.
Commenting on the results, chairman and CEO Stephen Sadove said: "While the second quarter was our fourteenth consecutive quarter of posting a comparable store sales increase, our sales growth was modestly below our expectations.
"This shortfall contributed to our second quarter year-over-year gross margin rate decline and selling, general and administrative expense deleverage."
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