Apparel and footwear retailer Stage Stores, Inc. (SSI) reported Thursday a narrower loss for the third quarter, reflecting mainly the absence of a hefty goodwill impairment that dented prior-year results. The company also lifted its outlook for the fourth quarter and fiscal year 2009.
For the third quarter, net loss narrowed sharply to $7.32 million or $0.19 per share from $102.79 million or $2.66 per share reported in the corresponding quarter last year.
The results of the prior-year quarter included goodwill impairment of $95.37 million. Excluding the impairment, loss was $7.42 million or $0.19 a share in the year-ago period.
On average, four analysts polled by Thomson Reuters expected the company to report a loss of $0.23 per share for the third quarter. Analysts' estimate typically excludes special items.
Net sales for the period declined to $324.94 million from $333.76 million in the third quarter of the prior fiscal year. Five analysts were expecting revenue of $324.35 for the quarter.
Andy Hall, Chief Executive of Stage Stores, said, "Strong inventory and expense control lead to increases in both our gross margin and SG&A leverage. In the quarter, our gross margin rate increased 20 basis points while our SG&A expenses declined by $1.2 million, despite operating 27 additional stores."
For the nine-month period, net income was $869 thousand or $0.02 per share, compared to a loss of $90.87 million or $2.37 per share last year. Adjusted earnings were $4.50 million or $0.12 a share in the past year. Sales came down to $1.00 billion from $1.06 billion in the same period last year.
The company noted that it opened 16 new stores during the three-month period and opened 27 new stores during the year. Stage Stores expects to open a similar number of new stores in 2010.
Looking ahead, for the fourth quarter, the company raised its earnings guidance to a range of $0.56 - $0.66 per share from the earlier range of $0.54 - $0.65 per share. Stage Stores said it is raising its fourth-quarter comparable store sales outlook to a decrease of 4.0% to 7.0% from earlier projected decrease of 5.0% to 8.0%. The company also raised its quarterly sales guidance to a range from $429 million to $442 million from its prior range of $425 million to $438 million.
Analysts are currently looking for earnings of $0.62 per share on revenue of $432.92 million in the fourth quarter.
For full year 2009, the company lifted its earnings per share guidance to $0.59 - $0.69 from $0.47 - $0.65, and anticipates revenues of $1.42 billion - $1.44 billion compared with the earlier range of $1.41 billion - $1.44 billion. Analysts expect the company to record earnings of $0.61 per share on revenue of $1.44 billion for the full year.
SSI closed Wednesday's regular trading hours at $12.34 on the NYSE.
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