Stage Stores Q4 Profit Rises, but Misses Expectation

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Houston—Stage Stores Inc. today reported that its fourth quarter profit rose 2.3% but still missed expectations due to increased promotional activity during holiday.

For the quarter ended Jan. 28, Stage Stores posted a profit of $32.7 million, or $1.05 a share, up from $32 million, or 86 cents a share, a year earlier. Its earnings were under the company’s November forecast for $1.17 to $1.23 a share and below analysts’ average estimate expecting $1.07.

Net sales rose 5.6% to $479.1 million, beating the company’s own November forecast for $464 million to $473 million.

“We are pleased that we met our sales expectations for the fourth quarter; however, despite a 22% increase in earnings per share, we fell short of our bottom-line goal. Our results are a reflection of the highly promotional business environment that was prevalent throughout the quarter…” said Andy Hall, president/ceo.

Stage, which tends to locate its stores in small and mid-size towns, had warned in February that a heavily promotional retail scene would hurt its margins.

‘Modest Improvement in Economy’

Gross margin narrowed to 31.4% from 32.2%, reflecting heightened promotional activities and the higher costs the company absorbed.

The company said last month that its February comparable store sales increased 1.3% compared to its forecast for flat to 2% increase.

For its fiscal 2012, the company forecast earnings of $1.02 to $1.14 a share on sales between $1.58 billion and $1.61 billion. However, analysts’ average estimate expects $1.21 a share on $1.56 billion in sales.

“While we believe there will be a modest improvement in the economy, we also believe that the current promotional business environment will likely continue in 2012,” Hall added. “We are planning to open 30 to 35 department stores and 25 to 30 Steele’s off-price stores during the year, and we expect net capital expenditures of approximately $45 million.”

Stage Stores also announced that it intends to spend the $100 million remaining balance of its $200 million Stock Repurchase Program by the end of 2013.


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