US: Sandy weighs on Saks despite Q3 profit jump
- Q3 profit climbs to $22.6m or $0.14 per share
- Sales rose 3.0% to $713.2m
- Comparable store sales increased 3.3%
Upscale department store retailer Saks Incorporated today (13 November) said it remains cautious in its outlook for the rest of the year as the aftermath of Hurricane Sandy takes its toll.
The retailer expects same-store sales to be flat in the fourth quarter, with the impact of the storm leading to "soft" sales in the first two weeks of November, a decline in online sales in the Northeast of the country, and more than half of its store revenue base affected.
Eleven of the company's 45 Saks Fifth Avenue stores were close, including its New York flagship, as well as 15 of its 64 Off 5th stores.
The update came as the retailer posted a third-quarter profit of $22.6m or $0.14 per share, compared with $17.8m, or $0.11 per share, a year earlier. Excluding a reversal of $3.3m in Federal income tax reserves, the retailer said it would have recorded a profit of $19.3m or $0.12 per share.
Sales in the three months to 27 October rose 3.0% to $713.2m, up from $692.3m a year ago. Comparable store sales increased 3.3% in the quarter, although this came in below initial expectations.
Gross margin rate slipped to 43.9% from 44.2% on the back of higher promotional activity.
Strong-performing merchandise categories included women's and men's contemporary apparel, and women's and men's shoes.
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