Saks' February Sales Rise - Analyst Blog


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Luxury department store Saks Inc. ( SKS ) has reported positive same-store sales and total sales for the month of February, benefiting from sales of women's apparel, handbags and men's accessories.

Saks' comparable store sales grew 6.6% in February, while total Saks sales for the four weeks ended February 25, 2012 climbed 6.0% to $207.9 million, as compared to the sales of $196.2 million for the four weeks ended February 26, 2011. The comparable sales growth for the month of February is within the guidance range of 5% to 7% range for the full year 2012.

However, February same-store sales increase was lower than the 10.5% growth reported in January. Total sales climbed 7.2% over the prior year to $175.6 million for the five weeks ended January 29, 2012, as it benefited from a designer clearance event.

During the four-week period in February, the company saw growth in women's contemporary and 'WEAR NOW' apparel and handbags. Men's accessories, shoes, furnishings, and contemporary apparel also showed strong performance in February.

Alongside, peer company Macy's Inc. ( M ) also performed strongly in the month of February. Macy's total sales grew 5.5% to $1.9 billion for the four weeks ended Feb. 25, 2012, while its sales climbed 4.6% for the month of February 2012 on a same-store basis.

According to Reuters, both Saks and Macy's are expected to outperform in 2012, reflecting rising consumer confidence and their growing income during the holiday season. While Saks relies on its private-label brands and selling items at full prices, Macy's remain profitable with its unique private brands in the holiday quarter.

However, Saks remains concerned about the increased volatility in the financial markets and the overall uncertainty in the macroeconomic environment, which is forcing customers to stay away from discretionary items. We thus hold a Zacks #3 Rank for Saks, which translates into a short-term Hold rating. Currently, we maintain a long-term Neutral recommendation on the stock.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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