Stage Stores, Inc. (SSI) said Friday that its department store sales were impacted by unseasonably cool spring weather during the first quarter and spending on consolidating its South Hill operations cut into GAAP profits. Expenses rose for the quarter, swinging the company to a net loss for the quarter against expectations of a profit by analysts.
Stage Stores operates 872 department stores targeting price-conscious consumers in small and mid-size cities under the brands Bealls, Goody’s, Palais Royal, Peebles, Stage and Steele’s.
For the quarter ended May 4, Houston-based Stage Stores reported revenue of $378.64 million, up 3.5 percent from $365.7 million in last year’s first quarter. Net loss for the quarter totaled $6.86 million, or 21 cents per share, compared to a net loss of $418,000, or 1 cent per share, in Q1 2012. The net loss included special items of $9.7 million, or 19 cents per share, related to merging Stage’s South Hill, Virginia operations into its Houston headquarters. Excluding those charges, adjusted net loss was $800,000, or 2 cents per share, versus a profit of $1.4 million, or 5 cents per share, in the year prior quarter.
Wall Street was expecting adjusted earnings of 9 cents per share on revenue of $388.4 million.
Comparable sales at stores open more than one year improved by 0.7 percent. 10 new stores were opened during the latest quarter.
Gross profit fell to $90.22 million, or 23.8 percent of sales, from $93.84 million, or 25.7 percent of sales, in last year’s quarter. Selling, general and administrative costs rose to $99.6 million from $92.7 million.
“The unseasonably cool weather in March and April, particularly when compared to last year’s warm spring, strongly impacted our sales performance,” said Michael Glazer, president and chief executive at Stage Stores in a statement today. Glazer added that the company made “excellent progress” from an operational standpoint and that the South Hill consolidation remains on track for completion in mid-year, which is expected to boost productivity.
Stage Stores is still optimistic about the rest of 2013, despite the slow start, offering that it believes pent-up demand will benefit the second quarter. The company reiterated its outlook for same-store-sales’ growth (between 2 percent and 4 percent) and adjusted profits for the full-year of $1.45 to $1.55 per share. The EPS guidance excludes costs of about $16 million, or 30 cents per share, related to the South Hill consolidation.
The outlook is in line with analyst predictions of $1.53 per share in profits for 2013.
Shares of SSI were up about 6 percent this year as of Thursday’s close at $26.08 and have risen nearly 70 percent in the past 12 months. In early Friday action, the stock is dropping on the weak first-quarter report, losing almost 7 percent erase all the gains so far in 2013.