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Saks' net loss widens in second quarter of fiscal 2013

RBR Staff Writer Published 20 August 2013

Saks, an upscale department store chain, has reported a wider net loss of $19.6m in the second quarter of fiscal 2013, compared to a net loss of $12.3m in the corresponding period a year ago.

For second quarter ended 3 August 2013, net sales totaled $707.84m, compared with $704.1m a year earlier, up by 0.5%. Comparable store sales increased 1.5% in Q2.

Saks chairman and chief executive officer Stephen I Sadove said although the second quarter was its fourteenth consecutive quarter of posting a comparable store sales increase, sales growth was modestly below company's expectations.

"This shortfall contributed to our second quarter year-over-year gross margin rate decline and SG&A expense deleverage," Sadove added.

During the period, the company's gross margin rate was 36.6%, as against the rate of 37.2% in same period last year.

"Our gross margin deterioration in the second quarter was principally due to higher levels of markdowns in men's, women's shoes, and handbags. Sales in these areas were meaningfully above the Company average but fell below our level of inventory investments in these categories."

For the six months ended 3 August 2013, the company recorded net sales of $1.5bn, up by 3%, as compared to $1.4m in the same period last year.

Net income totaled $0.4m, as against the net income of $19.8m in same period a year ago. Comparable store sales for six months period rose by 3.8%.

"Our comparable store sales increases of 1.5% in the second quarter and 3.8% for the six months were on top of 4.7% increases in both the second quarter and first six months of last year," Sadove added.

The company currently operates 41 Saks Fifth Avenue stores, 68 Saks Fifth Avenue OFF 5TH stores, and saks.com.