Saks earnings hit by superstorm Sandy
New York, NY, United States (4E) – Saks Inc. reported increased revenue in fiscal fourth quarter although earnings fell 45 percent due to higher costs.
Saks had made a previous warning that it will expect flat gross margin and same-store sales, or sales at stores open at least a year, for the period. The luxury retailer also said that sales trends were weak in the aftermath of superstorm Sandy during the first two weeks of November.
The superstorm affected 55 percent of the company’s total store revenue base. Eleven of the 45 Saks Fifth Avenue stores were closed from one to seven days because of severe flooding and power outage. Its flagship New York store was closed for two days.
Net sales jumped 5.6 percent to $976.6mn, while same-store sales inched up 0.7 percent.
Saks announced a profit of $20.4mn, or 13 cents per share for the quarter ended Feb. 2. The report also included four cents in net charges related to store closings and asset impairment. Per share earnings remained flat at 17 cents excluding one-time items.
Saks’ gross margin slightly grew from 37.6 percent to 37.7 percent. Costs related to selling, general spending and administration climbed 9.1 percent. The results included a $3.53mn loss on the extinguishment of debt.