Stage Stores, Inc. (NYSE: SSI) today reported financial results for the
second quarter ended August 2, 2014.
Total sales were $377 million. Comparable store sales decreased 4.2%.
The Company reported net income of $11.2 million, or $0.35 per diluted
share, versus EPS of $0.29 for the second quarter of the prior year
period. On an adjusted basis, EPS from continuing operations in the 2013
second quarter was $0.45.
Michael Glazer, President and Chief Executive Officer, stated, “We found
the second quarter to be challenging, but we were encouraged that our
sales trend improved towards the end of the quarter. We were pleased
with the performance of our back-to-school categories as well as
cosmetics, which delivered another strong quarterly performance. We
managed our merchandise margins and inventory well and feel good about
forward looking inventory levels and content. We expect improved second
half results given our sales driving initiatives.”
Reported Results
The Company reported earnings of $11.2 million, or $0.35 per diluted
share, for the second quarter. For the prior year’s second quarter,
including discontinued operations and one-time items, the Company
reported earnings of $9.6 million, or $0.29 per diluted share. The prior
year’s quarterly earnings include results from the Steele’s division,
which was sold on March 7, 2014.
For the first six months of the fiscal year, comparable store sales
decreased 2.2%. The net loss for the first half of 2014, including
discontinued operations, was $7.6 million, or $0.24 per share, compared
to net income of $2.8 million, or $0.08 per diluted share, in the
comparable prior year period.
Revised Full Year 2014 Guidance
Comparable store sales for the second half of the year are now expected
to be in the range of flat to positive 2.0%. EPS guidance for the full
year from continuing operations is now expected to be in the range of
$1.05 - $1.15.
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2014 OUTLOOK*
|
|
|
|
FY 2013*
|
|
Sales ($mm)
|
|
|
$1,610
|
-
|
$1,625
|
|
|
|
$1,610
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS
|
|
|
$1.05
|
-
|
$1.15
|
|
|
|
$1.22**
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Shares (m)
|
|
|
32,240
|
|
|
|
32,765
|
|
|
|
|
|
|
|
|
|
|
*From continuing operations.
|
|
**Adjusted to exclude one-time items.
|
|
|
Conference Call Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time
to discuss its second quarter results. Interested parties can
participate in the Company’s conference call by dialing 703-639-1358.
Alternatively, interested parties can listen to a live webcast of the
conference call by logging on to the Company's web site at www.stagestoresinc.com
and then clicking on Investor Relations, then Webcasts and then the
webcast link. A replay of the conference call will be available online
until midnight on Friday, August 29, 2014.
About Stage Stores
Stage Stores, Inc. operates primarily in small and mid-sized towns and
communities. Its stores, which operate under the Bealls, Goody’s, Palais
Royal, Peebles and Stage names, offer moderately priced, nationally
recognized brand name apparel, accessories, cosmetics and footwear for
the entire family. The Company currently operates 849 stores in 40
states. The Company also has an eCommerce website. For more information
about Stage Stores, visit the Company’s web site at www.stagestoresinc.com.
Caution Concerning Forward-Looking Statements
This document contains “forward-looking statements”. Forward-looking
statements reflect our expectations regarding future events and
operating performance and often contain words such as "believe",
"expect", "may", "will", "should", "could", "anticipate", "plan" or
similar words. In this document, forward-looking statements include
comments regarding the Company’s sales, EPS and diluted share count
outlooks for the 2014 fiscal year. Forward-looking statements also
include comments regarding the Company’s outlook for comparable store
sales for the second half of the 2014 fiscal year. Forward-looking
statements are subject to a number of risks and uncertainties which
could cause actual results to differ materially from those anticipated
by the forward-looking statements. These risks and uncertainties
include, but are not limited to, those described in our Annual Report on
Form 10-K as filed with the Securities and Exchange Commission (the
"SEC") on April 2, 2014, and other factors as may periodically be
described in our other filings with the SEC. Forward-looking statements
speak only as of the date of this document. We do not undertake to
update our forward-looking statements.
(Tables to Follow)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(in thousands, except earnings per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
|
August 2, 2014
|
|
|
August 3, 2013
|
|
|
|
|
Amount
|
|
% to Sales (1)
|
|
|
Amount
|
|
% to Sales (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
377,446
|
|
100.0
|
%
|
|
|
$
|
389,991
|
|
|
100.0
|
%
|
|
Cost of sales and related buying, occupancy and distribution expenses
|
|
|
|
265,106
|
|
70.2
|
%
|
|
|
|
274,416
|
|
|
70.4
|
%
|
|
Gross profit
|
|
|
|
112,340
|
|
29.8
|
%
|
|
|
|
115,575
|
|
|
29.6
|
%
|
|
Selling, general and administrative expenses
|
|
|
|
93,108
|
|
24.7
|
%
|
|
|
|
97,489
|
|
|
25.0
|
%
|
|
Store opening costs
|
|
|
|
224
|
|
0.1
|
%
|
|
|
|
122
|
|
|
0.0
|
%
|
|
Interest expense
|
|
|
|
755
|
|
0.2
|
%
|
|
|
|
708
|
|
|
0.2
|
%
|
|
Income from continuing operations before income tax
|
|
|
|
18,253
|
|
4.8
|
%
|
|
|
|
17,256
|
|
|
4.4
|
%
|
|
Income tax expense
|
|
|
|
7,061
|
|
1.9
|
%
|
|
|
|
6,424
|
|
|
1.6
|
%
|
|
Income from continuing operations
|
|
|
|
11,192
|
|
3.0
|
%
|
|
|
|
10,832
|
|
|
2.8
|
%
|
|
Loss from discontinued operations, net of tax benefit of $0 and
$715, respectively
|
|
|
|
-
|
|
0.0
|
%
|
|
|
|
(1,225
|
)
|
|
-0.3
|
%
|
|
Net income
|
|
|
$
|
11,192
|
|
3.0
|
%
|
|
|
$
|
9,607
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share data:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.35
|
|
|
|
|
$
|
0.33
|
|
|
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
Basic earnings per share
|
|
|
$
|
0.35
|
|
|
|
|
$
|
0.29
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
|
31,757
|
|
|
|
|
|
32,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share data:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.35
|
|
|
|
|
$
|
0.33
|
|
|
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.35
|
|
|
|
|
$
|
0.29
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
31,825
|
|
|
|
|
|
33,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percentages may not foot due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(in thousands, except earnings per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
|
|
August 2, 2014
|
|
|
August 3, 2013
|
|
|
|
|
Amount
|
|
% to Sales (1)
|
|
|
Amount
|
|
% to Sales (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
749,486
|
|
|
100.0
|
%
|
|
|
$
|
762,094
|
|
|
100.0
|
%
|
|
Cost of sales and related buying, occupancy and distribution expenses
|
|
|
|
559,205
|
|
|
74.6
|
%
|
|
|
|
556,890
|
|
|
73.1
|
%
|
|
Gross profit
|
|
|
|
190,281
|
|
|
25.4
|
%
|
|
|
|
205,204
|
|
|
26.9
|
%
|
|
Selling, general and administrative expenses
|
|
|
|
189,162
|
|
|
25.2
|
%
|
|
|
|
195,436
|
|
|
25.6
|
%
|
|
Store opening costs
|
|
|
|
1,032
|
|
|
0.1
|
%
|
|
|
|
1,097
|
|
|
0.1
|
%
|
|
Interest expense
|
|
|
|
1,479
|
|
|
0.2
|
%
|
|
|
|
1,294
|
|
|
0.2
|
%
|
|
Income (loss) from continuing operations before income tax
|
|
|
|
(1,392
|
)
|
|
-0.2
|
%
|
|
|
|
7,377
|
|
|
1.0
|
%
|
|
Income tax expense (benefit)
|
|
|
|
(538
|
)
|
|
-0.1
|
%
|
|
|
|
2,733
|
|
|
0.4
|
%
|
|
Income (loss) from continuing operations
|
|
|
|
(854
|
)
|
|
-0.1
|
%
|
|
|
|
4,644
|
|
|
0.6
|
%
|
|
Loss from discontinued operations, net of tax benefit of $4,257 and
$1,114, respectively
|
|
|
|
(6,748
|
)
|
|
-0.9
|
%
|
|
|
|
(1,893
|
)
|
|
-0.2
|
%
|
|
Net income (loss)
|
|
|
$
|
(7,602
|
)
|
|
-1.0
|
%
|
|
|
$
|
2,751
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share data:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
$
|
0.14
|
|
|
|
|
Discontinued operations
|
|
|
|
(0.21
|
)
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
Basic earnings (loss) per share
|
|
|
$
|
(0.24
|
)
|
|
|
|
|
$
|
0.08
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
|
31,624
|
|
|
|
|
|
|
32,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share data:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
$
|
0.14
|
|
|
|
|
Discontinued operations
|
|
|
|
(0.21
|
)
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
Diluted earnings per share
|
|
|
$
|
(0.24
|
)
|
|
|
|
|
$
|
0.08
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
31,624
|
|
|
|
|
|
|
32,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percentages may not foot due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands, except par value)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
August 2, 2014
|
|
|
February 1, 2014
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
26,094
|
|
|
|
$
|
14,762
|
|
|
Merchandise inventories, net
|
|
|
|
451,465
|
|
|
|
|
434,407
|
|
|
Prepaid expenses and other current assets
|
|
|
|
48,368
|
|
|
|
|
40,082
|
|
|
Total current assets
|
|
|
|
525,927
|
|
|
|
|
489,251
|
|
|
|
|
|
|
|
|
|
|
Property, equipment and leasehold improvements, net
|
|
|
|
280,903
|
|
|
|
|
282,534
|
|
|
Intangible asset
|
|
|
|
14,910
|
|
|
|
|
14,910
|
|
|
Other non-current assets, net
|
|
|
|
24,112
|
|
|
|
|
24,142
|
|
|
Total assets
|
|
|
$
|
845,852
|
|
|
|
$
|
810,837
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
125,480
|
|
|
|
$
|
125,707
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
69,796
|
|
|
|
|
69,549
|
|
|
Total current liabilities
|
|
|
|
195,276
|
|
|
|
|
195,256
|
|
|
|
|
|
|
|
|
|
|
Long-term debt obligations
|
|
|
|
107,415
|
|
|
|
|
60,871
|
|
|
Other long-term liabilities
|
|
|
|
96,666
|
|
|
|
|
100,266
|
|
|
Total liabilities
|
|
|
|
399,357
|
|
|
|
|
356,393
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.01, 100,000 shares authorized,
|
|
|
|
|
|
|
|
31,789 and 31,222 shares issued, respectively
|
|
|
|
318
|
|
|
|
|
312
|
|
|
Additional paid-in capital
|
|
|
|
391,678
|
|
|
|
|
384,295
|
|
|
Less treasury stock - at cost, 0 and 0 shares, respectively
|
|
|
|
(855
|
)
|
|
|
|
(967
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(4,493
|
)
|
|
|
|
(4,616
|
)
|
|
Retained earnings
|
|
|
|
59,847
|
|
|
|
|
75,420
|
|
|
Total stockholders' equity
|
|
|
|
446,495
|
|
|
|
|
454,444
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
845,852
|
|
|
|
$
|
810,837
|
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
|
|
August 2, 2014
|
|
|
August 3, 2013
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(7,602
|
)
|
|
|
$
|
2,751
|
|
|
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
|
|
|
|
|
|
|
|
Depreciation, amortization and impairment of long-lived assets
|
|
|
|
31,261
|
|
|
|
|
30,664
|
|
|
Loss on retirements of property, equipment and leasehold improvements
|
|
|
|
655
|
|
|
|
|
261
|
|
|
Deferred income taxes
|
|
|
|
(262
|
)
|
|
|
|
70
|
|
|
Tax benefit from stock-based compensation
|
|
|
|
126
|
|
|
|
|
1,779
|
|
|
Stock-based compensation expense
|
|
|
|
4,436
|
|
|
|
|
4,025
|
|
|
Amortization of debt issuance costs
|
|
|
|
150
|
|
|
|
|
129
|
|
|
Excess tax benefits from stock-based compensation
|
|
|
|
(826
|
)
|
|
|
|
(1,998
|
)
|
|
Deferred compensation obligation
|
|
|
|
(112
|
)
|
|
|
|
197
|
|
|
Amortization of employee benefit related costs
|
|
|
|
199
|
|
|
|
|
305
|
|
|
Construction allowances from landlords
|
|
|
|
2,756
|
|
|
|
|
1,418
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Increase in merchandise inventories
|
|
|
|
(17,058
|
)
|
|
|
|
(28,322
|
)
|
|
Increase in other assets
|
|
|
|
(8,416
|
)
|
|
|
|
(11,764
|
)
|
|
Decrease in accounts payable and other liabilities
|
|
|
|
(7,396
|
)
|
|
|
|
(344
|
)
|
|
Total adjustments
|
|
|
|
5,513
|
|
|
|
|
(3,580
|
)
|
|
Net cash used in operating activities
|
|
|
|
(2,089
|
)
|
|
|
|
(829
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Additions to property, equipment and leasehold improvements
|
|
|
|
(30,286
|
)
|
|
|
|
(29,937
|
)
|
|
Proceeds from disposal of assets
|
|
|
|
1,448
|
|
|
|
|
11
|
|
|
Net cash used in investing activities
|
|
|
|
(28,838
|
)
|
|
|
|
(29,926
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Proceeds from revolving credit facility borrowings
|
|
|
|
227,365
|
|
|
|
|
214,725
|
|
|
Payments of revolving credit facility borrowings
|
|
|
|
(179,600
|
)
|
|
|
|
(169,650
|
)
|
|
Payments of long-term debt obligations
|
|
|
|
(1,412
|
)
|
|
|
|
(363
|
)
|
|
Payments of debt issuance costs
|
|
|
|
-
|
|
|
|
|
(125
|
)
|
|
Payments for stock related compensation
|
|
|
|
(1,989
|
)
|
|
|
|
(2,165
|
)
|
|
Proceeds from exercise of stock awards
|
|
|
|
5,040
|
|
|
|
|
9,949
|
|
|
Excess tax benefits from stock-based compensation
|
|
|
|
826
|
|
|
|
|
1,998
|
|
|
Cash dividends paid
|
|
|
|
(7,971
|
)
|
|
|
|
(7,405
|
)
|
|
Net cash provided by financing activities
|
|
|
|
42,259
|
|
|
|
|
46,964
|
|
|
Net increase in cash and cash equivalents
|
|
|
|
11,332
|
|
|
|
|
16,209
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
14,762
|
|
|
|
|
17,937
|
|
|
End of period
|
|
|
$
|
26,094
|
|
|
|
$
|
34,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
(in thousands, except earnings per share)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
Twenty-Six Weeks Ended
|
|
|
|
|
August 2, 2014
|
|
August 3, 2013
|
|
|
August 2, 2014
|
|
August 3, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
On a U.S. GAAP basis
|
|
|
$
|
11,192
|
|
$
|
9,607
|
|
|
$
|
(7,602
|
)
|
|
$
|
2,751
|
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
1,225
|
|
|
|
6,748
|
|
|
|
1,893
|
|
Income (loss) from continuing operations
|
|
|
|
11,192
|
|
|
10,832
|
|
|
|
(854
|
)
|
|
|
4,644
|
|
South Hill Consolidation related charges, net of tax of $2,367 and
5,983, respectively
|
|
|
|
-
|
|
|
4,104
|
|
|
|
-
|
|
|
|
10,166
|
|
On a non-U.S. GAAP basis
|
|
|
$
|
11,192
|
|
$
|
14,936
|
|
|
$
|
(854
|
)
|
|
$
|
14,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
On a U.S. GAAP basis
|
|
|
$
|
0.35
|
|
$
|
0.29
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.08
|
|
Loss from discontinued operations
|
|
|
|
-
|
|
|
0.04
|
|
|
|
0.21
|
|
|
|
0.06
|
|
Income (loss) from continuing operations
|
|
|
|
0.35
|
|
|
0.33
|
|
|
|
(0.03
|
)
|
|
|
0.14
|
|
South Hill Consolidation related charges
|
|
|
|
-
|
|
|
0.12
|
|
|
|
-
|
|
|
|
0.31
|
|
On a non-U.S. GAAP basis
|
|
|
$
|
0.35
|
|
$
|
0.45
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.45
|
Copyright Business Wire 2014