Department store retailer Stage Stores Inc has posted a 20% drop in fourth quarter profit on lower same-store sales, and says it sees no near-term improvement in economic conditions.

The Houston-based firm said net income for the 13 weeks to 2 February was $31.7m, or $0.78 per share, compared to $39.6m, or $0.88 per share, in the previous year's 14 week quarter.

Total sales for quarter fell 3.7% to $473.0m from $491.2m, but said taking into account the extra week in last year's quarter, its results would have been flat with the prior year.

Comparable store sales fell 3.1%.

Jim Scarborough, chairman and CEO, said the quarter benefited from careful management of inventory levels and merchandise receipt flows, and tight controls over operating expenses.

"Given the challenging economic environment that we operated in throughout 2007, we are pleased with our fourth quarter results," he added.
For the year, net income slipped 4% to $53.1m, or $1.24 per share, from $55.3m, or $1.25 per share, for the prior year.

Annual sales were down 0.3% to $1,545.6m from $1,550.2m and same-store sales fell 1.1%.

Mr Scarborough said 2007 was "tremendously challenging" with issues including "an economically stressed consumer, unseasonable weather patterns, and a general lack of must-have apparel items, particularly in the misses sportswear area. "

Looking ahead, the retailer has taken a conservative view in its sales estimates for 2008, with profit of $48.4m- $53.7m on sales of $1,604m-$1,637m.

For the first quarter of fiscal 2008, profit is likely to be between $5.0m and $6.2m, or $0.13-$0.16 per share, the company said, on sales of $360m-$367m. This compares to a first quarter profit of $9.1m or $0.20 per share, in the first quarter of 2007.

Stage Stores operates 695 stores under the Bealls, Palais Royal, Stage and Peebles names.