Saks reported net income of $32.1 million ($0.18 Diluted EPS) for the first quarter ended Apr 28, a 13% gain from a year ago. Net sales increased 3.8% to $753.6 million, while same-store sales rose 4.8%, the 9th straight quarterly gain but smallest since Q2 ’09. Several merchandise categories showed sales strength during the first quarter, including women’s WEAR NOW and contemporary apparel; dresses; women’s shoes; and men’s contemporary apparel, shoes, and accessories. The New York City flagship store sales performance was in line with the comparable store sales performance of the Company’s stores in the aggregate during the quarter. Stephen I. Sadove, Chairman and Chief Executive Officer of the Company, noted, “We continued to make solid progress during the first quarter. Our year-over-year earnings improvement was driven by a 4.8% comparable store sales increase, on top of a 10.2% comparable store sales increase in last year’s first quarter, and continued gross margin rate improvement.” Sadove noted, “Year-over-year first quarter sales growth was solid but not as robust as in prior quarters. While we continue to see overall growth in the business, certain areas experienced a deceleration in sales. Specifically, some categories within the women’s ready-to-wear zone (such as women’s designer apparel) did not meet our sales expectations, and consequently, we anticipate some incremental markdown pressure in the second quarter as we clear inventory and move through the normal clearance period,” Comparable store sales growth is expected to be in the mid-single digit range for both the second quarter and the second half of the fiscal year. Comparable store inventory levels are expected to be up in the mid-single digit range throughout the balance of the year. Gross margin rate to decline approximately 100 to 125 basis points in the second quarter and to increase approximately 25 to 50 basis points in the second half of the fiscal year.
