Saks Post Quarterly Profit Versus Year-Ago Loss
Upscale retail chain Saks reported a quarterly profit on Wednesday, reversing a year-earlier loss, helped by better-than-expected sales, higher store traffic and cost controls.
The operator of Saks Fifth Avenue stores earned $21.5 million, or 14 cents a share, in the fourth quarter, compared with a year-earlier loss of $2.2 million, or 2 cents a share.
The latest quarter included an extra week.
The company said results were helped by a 9.9% rise in sales at stores open at least a year, gross margin improvement and cost controls.
Quarterly sales rose about 17% to $955 million.
Saks, which sells high-end brands such as Gucci and Chanel, said it was selling more full-priced merchandise, and customer traffic and the average sale improved during the quarter.
Gross margin improved to 37.9% of sales from 33.6% a year earlier.
Saks said it believes an 8% operating margin could be reached within the next three years. For 2007, it said operating margin excluding certain items should approach 4%.
The company said sales at stores open at least a year rose 24.7% in the four weeks ended March 3.