Houston—Reporting that its second quarter earnings dropped 18%, Stage Stores Inc. today lowered its full year profit.
For the quarter ended August 3, the owner of regional department stores under Bealls, Goody’s, Peebles and other names posted net earnings of $9.6 million, or 29 cents a share, compared with earnings of $11.7 million, or 37 cents a share, last year. Excluding costs related to the consolidation of its South Hill, Va., operations, Stage Stores posted adjusted earnings of 41 cents a share. That missed analysts’ average estimate for earnings of 46 cents a share.
Total net sales increased 3.6% to $395 million, but missed analysts’ estimate for $403.55 million in sales. Comparable store sales were up 1.7%.
South Hill Consolidation
The company reported that its footwear, men’s, children’s, junior’s and cosmetics categories all had comparable store sales increases that exceeded the company average.
Stage also saw selling, general and administrative expenses rise nearly 5% to $99.3 million.
While Stage Stores said that its back-to-school sales helped total sales today the end of the quarter, the company had a shortfall in sales from its South Hill stores.
“While the operational components of the consolidation have been completed, the alignment of merchandise assortments in the stores is taking longer than expected,” CEO Michael Glazer said.
Looking ahead, Stage Stores now projects that its full year comparable store sales will be 1.6%, up from its previous 0.6% estimate. Meanwhile, the company now expects adjusted full year earnings between $1.30 to $1.40, down from its previous forecast for earnings of $1.45 to $1.55 a share.
Analysts’ average earnings forecast is for $1.47 a share.