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Press release from Business Wire

Stage Stores Reports First Quarter Results

<p class='bwalignc'> <b>Provides Second Quarter and Updated Full Year Guidance</b> </p>

Thursday, May 19, 2011

Stage Stores Reports First Quarter Results06:00 EDT Thursday, May 19, 2011 HOUSTON (Business Wire) -- Stage Stores, Inc. (NYSE: SSI) today reported a net loss for the first quarter ended April 30, 2011 of $461 thousand, or $0.01 per share, compared to net income of $2.2 million, or $0.06 per diluted share, for the prior year first quarter ended May 1, 2010. Andy Hall, President and Chief Executive Officer, commented, “Adverse February sales, disappointing Easter sales and near-record gasoline prices resulted in flat comparable store sales for the quarter. The February sales loss forced us to increase promotional activity in March and April as we attempted to make up the sales shortfall. “The combination of our sales performance, delayed clearance selling caused by missing the February clearance window, and our stepped-up promotional activities, negatively impacted our merchandise margins and led to our one cent loss for the quarter. “We remain optimistic about the remainder of the year. We believe our March and April combined comparable store sales results of 3.3% is a better indicator of our go forward run rate. In addition, we remain very pleased with the performance of our rebranded Goody's stores and with the progress we have made with our eCommerce business,” Mr. Hall concluded. Stock Repurchase Activity The Company also reported today that it repurchased approximately 922,000 shares of its common stock during the first quarter at a total cost of approximately $16.6 million. The shares were repurchased under the Company's $200 million Stock Repurchase Program. The Company stated that it still intends to repurchase up to $100 million of its outstanding shares during 2011 and to complete the Program by the end of 2013. Fiscal 2011 – Second Quarter and Updated Full Year Guidance2nd Quarter 2011 The Company is projecting an increase in comparable store sales for the quarter of between 1.0% and 3.0%.                               2Q 2011 OUTLOOK2Q 2010 Sales ($mm) $355   -   $362 $345   Diluted EPS $0.28 - $0.31 $0.27   Diluted Shares (m) 36,600 38,587   FY 2011 The Company is projecting an increase in comparable store sales for 2011 of between 0.8% and 2.4%. The Company's EPS guidance for the year is now $1.04 to $1.13 versus its original guidance of $1.07 to $1.17. The Company noted that the EPS and diluted share projections for the year only reflect the impact of shares repurchased in the first quarter with no benefit factored in for shares that may be repurchased during the remaining three quarters of the year.                               FY 2011 OUTLOOKFY 2010 Sales ($mm) $1,512   -   $1,535 $1,471   Diluted EPS $1.04 - $1.13 $0.99   Diluted Shares (m) 36,730 38,010   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 703-639-1121. 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, then clicking on Investor Relations, then Webcasts, and then the webcast link. A replay of the conference call will be available online until midnight on Friday, May 27, 2011. 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 798 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 and full 2011 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, 2011, 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 per share data) (Unaudited)         Thirteen Weeks Ended April 30, 2011 May 1, 2010 Amount % to Sales (1) Amount % to Sales (1)   Net sales $ 346,483 100.0 % $ 340,042 100.0 % Cost of sales and related buying, occupancy and distribution expenses   261,263   75.4 %   250,147 73.6 % Gross profit 85,220 24.6 % 89,895 26.4 % Selling, general and administrative expenses 83,602 24.1 % 83,849 24.7 % Store opening costs 2,734 0.8 % 1,456 0.4 % Interest expense, net of income of $22 and $29, respectively   906   0.3 %   1,045 0.3 % (Loss) income before income tax (2,022 ) -0.6 % 3,545 1.0 % Income tax (benefit) expense   (1,561 ) -0.5 %   1,347 0.4 % Net (loss) income $ (461 ) -0.1 % $ 2,198 0.6 %   Basic and diluted (loss) earnings per share data: Basic (loss) earnings per share $ (0.01 ) $ 0.06 Basic weighted average shares outstanding   36,279     38,273   Diluted (loss) earnings per share $ (0.01 ) $ 0.06 Diluted weighted average shares outstanding   36,279     38,773     (1) Percentages may not foot due to rounding.   Stage Stores, Inc.Condensed Consolidated Balance Sheets (in thousands, except par value) (Unaudited)     April 30, 2011 January 29, 2011   ASSETS Cash and cash equivalents $ 66,296 $ 89,349 Merchandise inventories, net 382,431 325,501 Prepaid expenses and other current assets   22,655     30,423   Total current assets 471,382 445,273   Property, equipment and leasehold improvements, net 314,952 317,954 Intangible asset 14,910 14,910 Other non-current assets, net   19,738     17,947   Total assets $ 820,982   $ 796,084     LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 148,224 $ 95,365 Current portion of debt obligations 13,688 13,490 Accrued expenses and other current liabilities   61,889     74,318   Total current liabilities 223,801 183,173   Long-term debt obligations 21,505 25,002 Other long-term liabilities   98,940     98,400   Total liabilities   344,246     306,575     Commitments and contingencies   Common stock, par value $0.01, 100,000 shares authorized, 57,455 and 56,946 shares issued, respectively 575 569 Additional paid-in capital 523,639 516,079 Less treasury stock - at cost, 21,430 and 20,508 shares, respectively (337,203 ) (320,055 ) Accumulated other comprehensive loss (2,911 ) (2,935 ) Retained earnings   292,636     295,851   Total stockholders' equity   476,736     489,509   Total liabilities and stockholders' equity $ 820,982   $ 796,084     Stage Stores, Inc.Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited)     Thirteen Weeks Ended April 30, 2011 May 1, 2010   Cash flows from operating activities: Net (loss) income $ (461 ) $ 2,198 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 15,425 14,317 Loss on retirements of property and equipment 136 - Deferred income taxes (11 ) (40 ) Tax benefits from stock-based compensation 301 1,277 Stock-based compensation expense 1,782 1,167 Amortization of debt issuance costs 75 75 Excess tax benefits from stock-based compensation (667 ) (1,905 ) Deferred compensation obligation 67 47 Amortization of employee benefit related costs 39 107 Construction allowances from landlords 1,925 2,510 Changes in operating assets and liabilities: Increase in merchandise inventories (56,930 ) (42,835 ) Decrease in other assets 5,856 214 Increase in accounts payable and other liabilities   38,293     16,601   Total adjustments   6,291     (8,465 ) Net cash provided by (used in) operating activities   5,830     (6,267 )   Cash flows from investing activities: Additions to property, equipment and leasehold improvements (11,858 ) (8,496 ) Proceeds from retirements of property and equipment   93     -   Net cash used in investing activities   (11,765 )   (8,496 )   Cash flows from financing activities: Payments of long-term debt obligations (3,299 ) (3,442 ) Repurchases of common stock (17,148 ) (123 ) Proceeds from exercise of stock awards 5,416 4,829 Excess tax benefits from stock-based compensation 667 1,905 Cash dividends paid   (2,754 )   (1,913 ) Net cash (used in) provided by financing activities   (17,118 )   1,256   Net decrease in cash and cash equivalents (23,053 ) (13,507 )   Cash and cash equivalents: Beginning of period   89,349     93,714   End of period $ 66,296   $ 80,207   Stage Stores, Inc.Bob Aronson, 800-579-2302Vice President, Investor Relationsbaronson@stagestores.com