Luxury department store
Saks Inc.
(
SKS
) has reported positive same-store sales and total sales for the
month of May 2012, benefiting from the strong performance of
women's contemporary and "wear now" apparel.
Further, women's shoes, fashion and fine jewelry, cosmetics and
fragrances, men's contemporary apparel, and men's shoes all
contributed to the decent sales results.
Saks' comparable store sales increased 4.0% in May, with total
sales for the four weeks ended May 26, 2012 climbing 3.7% to $215.8
million. The comparable sales growth for the month of May 2012 was
within the mid-single digit guidance range for the second
quarter.
For the four months ended May 26, 2012, sales climbed 4.1% year
over year to $959.7 million compared with $921.8 million for the
prior year four months ended May 28, 2011.
Saks' peer
Macy's Inc.
(
M
) also performed well in the month of May. Macy's total sales grew
4.1% to $2.0 billion for the four-week period ended May 26, 2012
compared with total sales of $1.9 billion for the month of May
2011. Same-store sales rose 4.2% year over year for the month.
Guidance
Saks projects same-store inventory levels to increase in the
mid-single-digit range throughout fiscal 2012.
Saks has planned to invest in some operational initiatives and
other strategies in the calendar year 2012 such as the project
evolution systems implementation, hold and flow, and other local
marketing business plans, which are expected to have a meaningful
beneficial impact in the calendar year 2013 and beyond.
Further, the company intends to be very strategic in its
SG&A spending, inventory management and capital expenditure.
The company expects 30 to 50 basis points of SG&A expense
deleverage in the second quarter and approximately 50 to 75 basis
points in the second half of fiscal 2012.
The Zacks Consensus Estimate for the second quarter of 2012 is
currently pegged at a loss of 8 cents.
However, we remain concerned with the ever-changing demands of
the consumers, increased volatility in the financial markets and
the overall uncertainty in the macroeconomic environment.
Currently, we have a long-term Neutral recommendation on Saks,
which carries a Zacks #4 Rank (short-term Sell rating).
MACYS INC (M): Free Stock Analysis Report
SAKS INC (SKS): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research