Saks profits top 20 percent
By Don Hogsett -- Home Textiles Today, 3/8/2004
BIRMINGHAM, ALA. — Helped by sharply widening margins and stronger sales, Saks Inc. pushed fourth-quarter profits up by 20.1 percent, to $81.8 million from $68.1 million last year.
Earnings would have been even stronger but for $18.3 million in after-tax charges stemming from a debt restructuring; severance payouts for executives laid off in a recent management shuffle at the upstairs Saks Fifth Avenue (SFA) stores; a write-off of the company's investment in FAO Inc. and store-impairment charges.
Boosted by big gains at its tony Saks Fifth Avenue (SFA) franchise, overall sales at the diversified retailer rose by 6.9 percent, to $2 billion from $1.8 billion last year. Same-store sales rose a solid 5.9 percent.
Most of the sales improvement came out of the core SFA nameplate, which launched a major recovery, driving the top line up by 12.2 percent, to $765 million from $682 million last year. Same-store sales at SFA shot up by 10.4 percent.
Sales of Saks' various department store brands rose at a slower pace of 3.8 percent, to $1.6 billion from $1.2 billion. Same-store sales at department store rose by 3.2 percent.
Driven by the double-digit sales gains, operating profits in the SFA group shot up by 32.4 percent, to $70.3 million from $53.1 million a year ago. Earnings in department stores edged up by 5.9 percent, to $125.2 million from $118.2 million.
In a big lift to the bottom line, average gross margin strengthened by 190 basis points, or 1.9 percentage points, to 38 percent from 36.1 percent a year ago.
| Qtr. 1/31 (x000) | 2003 | 2002 | % chg |
| Sales | $1,968,944 | $1,841,521 | 6.9 |
| Oper. income (EBIT) | 321,662 | 312,625 | 2.9 |
| Net income | 81,814a | 68,114a | 20.1 |
| Per share (diluted) | 0.57 | 0.47 | 21.3 |
| Average gross margin | 38.0% | 36.1% | -- |
| SG&A expenses | 21.7% | 19.1% | -- |
| 12 months | 2003 | 2002 | % chg |
| Sales | 6,055,055 | 5,911,122 | 2.4 |
| Oper. income (EBIT) | 815,004 | 840,738 | -3.1 |
| Net income | 82,827b | 24,244b | 241.6 |
| Per share (diluted) | 0.58 | 0.17 | 241.2 |
| Average gross margin | 37.9% | 37.1% | -- |
| SG&A expenses | 24.4% | 22.9% | -- |
| a-Fourth-quarter results include $36.7 million in taxes other than income taxes, compared with $39.2 million last year; a reversal of $40,000 in integration costs, vs. $7.7 million in integration costs last year; a $7.8 million loss from long-lived assets, compared with a $17.6 million year-ago loss; a $10.5 million loss on the retirement of debt; and miscellaneous expense of $5.2 million, compared with $67,000 last year. b-12-month results include$149.1 million in taxes other than income taxes, compared with$153.8 million last year; a $62,000 reversal of earlier integration charges, compared with $10.0 million in integration charges a year ago; a loss of $8.2 million from long-lived assets vs. a $19.5 million loss in 2002; a $10.5 million loss on the retirement of debt vs. a $709,000 gain last year; and $109,000 in miscellaneous expense vs. $229,000 last year. |
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