The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Stage Stores Reports First Quarter EPS of $0.06

<p class=' bwtextaligncenter'> <b>Raises Fiscal 2010 EPS Guidance Range to $0.90 - $1.00</b> </p> <p class='bwwhitespacenowrap'> </p>

Thursday, May 20, 2010

Stage Stores Reports First Quarter EPS of $0.0606:00 EDT Thursday, May 20, 2010 HOUSTON (Business Wire) -- Stage Stores, Inc. (NYSE:SSI) today reported net income for the first quarter ended May 1, 2010 of $2.2 million, or $0.06 per diluted share, compared to a net loss of $0.9 million, or $(0.02) per diluted share, for the prior year first quarter ended May 2, 2009. Andy Hall, President and Chief Executive Officer, commented, “We are pleased with our first quarter results, which reflect improving sales trends and solid operating leverage. Our 1.9% increase in sales was driven by the strength of our new stores and a 0.8% comparable store sales increase during the nine week March and April period. Tightly managed inventories and expenses led to 110 and 40 basis point improvements in gross profit and SG&A, respectively.” Mr. Hall continued, “Operationally during the quarter, we opened 18 new stores, 16 of which were opened under the Goody's nameplate. The total number of Goody's locations now stands at 33. We are very pleased with the performance of our new Goody's stores, and we continue to gain market share in those markets that formerly overlapped with a Goody's store. We added two Estee Lauder and two Clinique counters, re-introduced JH Collectibles, a moderately priced causal sportswear brand that is now exclusive to Stage Stores, and launched the exciting Wishful Park private label to our Juniors customer. We continued to pilot our markdown optimization tool and remain on schedule for a full roll-out by the end of the year. We also began work on an eCommerce platform, with full roll-out targeted for 2011.” Mr. Hall concluded, “We are encouraged by our first quarter results and continue on track to meet our fiscal 2010 objectives of growth in sales, operating margin, and EPS.” Fiscal 2010 – Second Quarter and Updated Full Year Guidance Commenting on the Company's second quarter guidance, Mr. Hall stated, “We are projecting second quarter sales to increase between 2.3% and 4.4%. The comparable store sales change is expected to range from flat to a 2.0% increase. This guidance reflects our current trend of business of plus 0.8% for the nine week March and April period.” 2nd Quarter 2010:           2Q 2010 OUTLOOK2Q 2009 Sales ($mm) $ 350   -   $ 357 $ 342   Diluted EPS $ 0.26 - $ 0.30 $ 0.24   Diluted Shares (m)   39,150 38,467   Commenting on the Company's full year guidance, Mr. Hall stated, “We are raising our fiscal 2010 comparable store sales guidance to flat to 1.5% and now expect EPS of $0.90 to $1.00, which is a $0.10 increase over our prior EPS guidance range of $0.80 to $0.90.” FY 2010:           FY 2010 OUTLOOKFY 2009 Sales ($mm) $ 1,467   -   $ 1,489 $ 1,432   Diluted EPS $ 0.90 - $ 1.00 $ 0.75   Diluted Shares (m)   39,080 38,413   Conference Call Information The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its first quarter results. Interested parties can participate in the Company's conference call by dialing 703-639-1206. Alternatively, interested parties can listen to a live webcast of the conference call by logging on to the Company's web site at www.stagestoresinc.com and then clicking on Webcasts, then the webcast link. A replay of the conference call will be available online until midnight on Friday, May 28, 2010. About Stage Stores Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small and mid-size towns and communities through 774 stores located in 39 states. The Company operates its stores under the five names of Bealls, Goody's, Palais Royal, Peebles and Stage. For more information about Stage Stores, visit the Company's web site at www.stagestoresinc.com. Caution Concerning Forward-Looking Statements This document contains “forward-looking statements”. Forward-looking statements reflect our expectations regarding future events and operating performance and often contain words such as "believe", "expect", "may", "will", "should", "could", "anticipate", "plan" or similar words. In this document, forward-looking statements include comments regarding the Company's sales and EPS outlooks for the second quarter of the 2010 fiscal year, as well as for the 2010 fiscal year. Forward-looking statements are subject to a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the "SEC") on March 30, 2010, and other factors as may periodically be described in our other filings with the SEC. Forward-looking statements speak only as of the date of this document. We do not undertake to update our forward-looking statements. Stage Stores, Inc.Condensed Consolidated Statements of Operations (in thousands, except earnings per share) (Unaudited)     Thirteen Weeks Ended May 1, 2010   May 2, 2009 Amount   % to Sales (1) Amount   % to Sales (1)   Net sales $ 340,042 100.0 % $ 333,566 100.0 % Cost of sales and related buying, occupancy and distribution expenses 250,147 73.6 % 249,083 74.7 % Gross profit 89,895 26.4 % 84,483 25.3 % Selling, general and administrative expenses 83,849 24.7 % 83,606 25.1 % Store opening costs 1,456 0.4 % 1,186 0.4 % Interest expense, net of income of $29 and $61, respectively   1,045 0.3 %   1,158   0.3 % Income (loss) before income tax 3,545 1.0 % (1,467 ) -0.4 % Income tax expense (benefit)   1,347 0.4 %   (562 ) -0.2 % Net income (loss) $ 2,198 0.6 % $ (905 ) -0.3 %   Basic and diluted earnings (loss) per share data: Basic earnings (loss) per share $ 0.06 $ (0.02 ) Basic weighted average shares outstanding   38,273   37,930     Diluted earnings (loss) per share $ 0.06 $ (0.02 ) Diluted weighted average shares outstanding   38,773   37,930         (1) Percentages may not foot due to rounding.   Stage Stores, Inc.Condensed Consolidated Balance Sheets (in thousands, except par value) (Unaudited)     May 1, 2010   January 30, 2010   ASSETS Cash and cash equivalents $ 80,207 $ 93,714 Merchandise inventories, net 349,195 306,360 Prepaid expenses and other current assets   26,306     27,095   Total current assets 455,708 427,169   Property, equipment and leasehold improvements, net 335,382 342,001 Intangible asset 14,910 14,910 Other non-current assets, net   17,132     16,351   Total assets $ 823,132   $ 800,431     LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 128,930 $ 100,602 Current portion of debt obligations 12,932 12,726 Accrued expenses and other current liabilities   59,584     69,688   Total current liabilities 201,446 183,016   Long-term debt obligations 34,844 38,492 Other long-term liabilities   103,248     102,877   Total liabilities   339,538     324,385     Commitments and contingencies   Common stock, par value $0.01, 100,000 shares authorized, 56,772 and 56,080 shares issued, respectively 568 561 Additional paid-in capital 509,113 501,800 Less treasury stock - at cost, 18,071 shares (288,202 ) (288,079 ) Accumulated other comprehensive loss (5,831 ) (5,897 ) Retained earnings   267,946     267,661   Total stockholders' equity   483,594     476,046   Total liabilities and stockholders' equity $ 823,132   $ 800,431     Stage Stores, Inc.Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited)       Thirteen Weeks Ended May 1, 2010   May 2, 2009   Cash flows from operating activities: Net income (loss) $ 2,198 $ (905 ) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization 14,317 14,932 Deferred income taxes (40 ) 288 Tax benefits (deficiency) from stock-based compensation 1,277 (249 ) Stock-based compensation expense 1,167 1,440 Amortization of debt issue costs 75 73 Excess tax benefits from stock-based compensation (1,905 ) (112 ) Deferred compensation 47 36 Amortization of employee benefit related costs 107 130 Construction allowances from landlords 2,510 1,706 Changes in operating assets and liabilities: Increase in merchandise inventories (42,835 ) (23,808 ) Decrease (increase) in other assets 214 (987 ) Increase in accounts payable and other liabilities   16,601     15,349   Total adjustments   (8,465 )   8,798   Net cash (used in) provided by operating activities   (6,267 )   7,893     Cash flows from investing activities: Additions to property, equipment and leasehold improvements   (8,496 )   (13,055 ) Net cash used in investing activities   (8,496 )   (13,055 )   Cash flows from financing activities: Proceeds from revolving credit facility borrowings - 132,923 Payments of revolving credit facility borrowings - (129,856 ) Proceeds from long-term debt obligations - 1,585 Payments of long-term debt obligations (3,442 ) (3,131 ) Repurchases of common stock (123 ) (151 ) Proceeds from exercise of stock options and stock appreciation rights 4,829 840 Excess tax benefits from stock-based compensation 1,905 112 Cash dividends paid   (1,913 )   (1,892 ) Net cash provided by financing activities   1,256     430   Net decrease in cash and cash equivalents (13,507 ) (4,732 )   Cash and cash equivalents: Beginning of period   93,714     26,278   End of period $ 80,207   $ 21,546