Stage Stores, Inc. (NYSE:SSI) today reported financial results for the
first quarter ended May 2, 2015.
First Quarter Highlights
-
Loss per share improved 29% to $0.27 this year from $0.38 last year.
-
180 bps improvement in merchandise margin.
-
Comparable sales decreased 1.1%, due in part to a Mother’s Day
marketing shift.
-
Direct-to-consumer sales increased 31%.
“Despite difficult market conditions and a marketing calendar shift, we
are pleased with the 29% earnings improvement over last year,” said
Michael Glazer, President and Chief Executive Officer. “We delivered
expanded merchandise margins and grew our direct-to-consumer business by
31%, while controlling our expenses. We are thrilled with our record
Mother’s Day sales, which moved our year-to-date comp sales into
positive territory after 14 weeks. As we look ahead, we remain confident
that we will deliver our expected sales and earnings growth in 2015.”
2015 Guidance
The Company reiterated prior guidance. Comparable sales are expected to
be in a range of flat to up 2%. Earnings per diluted share are expected
to be in a range of $1.20 to $1.28. Weighted average diluted shares for
the year are expected to be 32.7 million.
Conference Call / Webcast Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time
to discuss its first quarter results. Interested parties can participate
in the Company’s conference call by dialing 844-368-2238. Alternatively,
interested parties may listen to a live webcast of the conference call
through the Investor Relations section of the Company’s website (www.stagestoresinc.com)
under the “Webcasts” caption. A replay of the conference call will be
available online until midnight on Friday, May 29, 2015.
About Stage Stores
Stage Stores, Inc. operates 853 specialty department stores in 40 states
and direct-to-consumer channel under the BEALLS, GOODY'S, PALAIS ROYAL,
PEEBLES and STAGE nameplates. The Company’s stores, predominantly
located in small towns and communities, and direct-to-consumer business,
offer a moderately priced, broad selection of trend-right, brand name
apparel, accessories, cosmetics, footwear and home goods for the entire
family. The Company’s direct-to-consumer channel includes its e-commerce
website and Send program. Its e-commerce website features assortments of
merchandise similar to that found in its stores, as well as products
available exclusively online. The Send program allows customers in the
stores to have merchandise shipped directly to their homes if the
merchandise is not available in the local store. For more information
about Stage Stores, visit the Company’s website at www.stagestoresinc.com.
Caution Concerning Forward-Looking Statements
Certain statements in this release are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, and
such statements are intended to qualify for the protection of the safe
harbor provided by the Act. The words “anticipate,” “estimate,”
“expect,” “objective,” “goal,” “project,” “intend,” “plan,” “believe,”
“will,” “should,” “may,” “target,” “forecast,” “guidance,” “outlook” and
similar expressions generally identify forward-looking statements.
Similarly, descriptions of the Company’s objectives, strategies, plans,
goals or targets are also forward-looking statements. Forward-looking
statements relate to the expectations of management as to future
occurrences and trends, including statements expressing optimism or
pessimism about future operating results or events and projected sales,
earnings, capital expenditures and business strategy. Forward-looking
statements are based upon a number of assumptions concerning future
conditions that may ultimately prove to be inaccurate. Forward-looking
statements are based upon management’s then-current views and
assumptions regarding future events and operating performance. Although
management believes the expectations expressed in forward-looking
statements are based on reasonable assumptions within the bounds of its
knowledge, forward-looking statements involve risks, uncertainties and
other factors which may materially affect the Company’s business,
financial condition, results of operations or liquidity.
Forward-looking statements are not guarantees of future performance and
actual results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including,
but not limited to, economic conditions, cost and availability of goods,
inability to successfully execute strategic initiatives, competitive
pressures, economic pressures on the Company and its customers, freight
costs, the risks discussed in the Risk Factors section of the Company’s
most recent Annual Report on Form 10-K as filed with the Securities and
Exchange Commission (“SEC”), and other factors discussed from time to
time in the Company’s other SEC filings. This release should be read in
conjunction with such filings, and you should consider all of such
risks, uncertainties and other factors carefully in evaluating
forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. The Company
undertakes no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You
are advised, however, to consult any further disclosures the Company
makes on related subjects in its public announcements and SEC filings.
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(in thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
May 2, 2015
|
|
May 3, 2014
|
|
|
|
Amount
|
|
% to Sales (a)
|
|
Amount
|
|
% to Sales (a)
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
369,313
|
|
|
100.0
|
|
%
|
|
$
|
372,040
|
|
|
100.0
|
|
%
|
|
Cost of sales and related buying, occupancy and distribution expenses
|
|
288,384
|
|
|
78.1
|
|
%
|
|
294,099
|
|
|
79.1
|
|
%
|
|
Gross profit
|
|
80,929
|
|
|
21.9
|
|
%
|
|
77,941
|
|
|
20.9
|
|
%
|
|
Selling, general and administrative expenses
|
|
94,171
|
|
|
25.5
|
|
%
|
|
96,054
|
|
|
25.8
|
|
%
|
|
Store opening costs
|
|
304
|
|
|
0.1
|
|
%
|
|
808
|
|
|
0.2
|
|
%
|
|
Interest expense
|
|
579
|
|
|
0.2
|
|
%
|
|
724
|
|
|
0.2
|
|
%
|
|
Loss from continuing operations before income tax
|
|
(14,125
|
)
|
|
(3.8
|
)
|
%
|
|
(19,645
|
)
|
|
(5.3
|
)
|
%
|
|
Income tax benefit
|
|
(5,488
|
)
|
|
(1.5
|
)
|
%
|
|
(7,599
|
)
|
|
(2.0
|
)
|
%
|
|
Loss from continuing operations
|
|
(8,637
|
)
|
|
(2.3
|
)
|
%
|
|
(12,046
|
)
|
|
(3.2
|
)
|
%
|
|
Loss from discontinued operations, net of tax benefit of $4,257
|
|
—
|
|
|
—
|
|
%
|
|
(6,748
|
)
|
|
(1.8
|
)
|
%
|
|
Net loss
|
|
$
|
(8,637
|
)
|
|
(2.3
|
)
|
%
|
|
$
|
(18,794
|
)
|
|
(5.1
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share data:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.27
|
)
|
|
|
|
$
|
(0.38
|
)
|
|
|
|
Discontinued operations
|
|
—
|
|
|
|
|
(0.22
|
)
|
|
|
|
Basic loss per share
|
|
$
|
(0.27
|
)
|
|
|
|
$
|
(0.60
|
)
|
|
|
|
Basic weighted average shares outstanding
|
|
31,750
|
|
|
|
|
31,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share data:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.27
|
)
|
|
|
|
$
|
(0.38
|
)
|
|
|
|
Discontinued operations
|
|
—
|
|
|
|
|
(0.22
|
)
|
|
|
|
Diluted loss per share
|
|
$
|
(0.27
|
)
|
|
|
|
$
|
(0.60
|
)
|
|
|
|
Diluted weighted average shares outstanding
|
|
31,750
|
|
|
|
|
31,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Percentages may not foot due to rounding.
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands, except par value)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
May 2, 2015
|
|
January 31, 2015
|
|
ASSETS
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
24,606
|
|
|
$
|
17,165
|
|
|
Merchandise inventories, net
|
|
486,705
|
|
|
441,452
|
|
|
Prepaid expenses and other current assets
|
|
40,724
|
|
|
45,444
|
|
|
Total current assets
|
|
552,035
|
|
|
504,061
|
|
|
|
|
|
|
|
|
Property, equipment and leasehold improvements, net
|
|
292,174
|
|
|
285,450
|
|
|
Intangible asset
|
|
14,910
|
|
|
14,910
|
|
|
Other non-current assets, net
|
|
22,167
|
|
|
20,256
|
|
|
Total assets
|
|
$
|
881,286
|
|
|
$
|
824,677
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts payable
|
|
$
|
154,903
|
|
|
$
|
121,778
|
|
|
Accrued expenses and other current liabilities
|
|
70,840
|
|
|
83,004
|
|
|
Total current liabilities
|
|
225,743
|
|
|
204,782
|
|
|
|
|
|
|
|
|
Long-term debt obligations
|
|
93,392
|
|
|
45,673
|
|
|
Other long-term liabilities
|
|
98,666
|
|
|
98,292
|
|
|
Total liabilities
|
|
417,801
|
|
|
348,747
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.01, 100,000 shares authorized, 31,946 and
31,632 shares issued, respectively
|
|
319
|
|
|
316
|
|
|
Additional paid-in capital
|
|
396,060
|
|
|
395,395
|
|
|
Less treasury stock - at cost, 0 and 0 shares, respectively
|
|
(697
|
)
|
|
(600
|
)
|
|
Accumulated other comprehensive loss
|
|
(6,763
|
)
|
|
(6,874
|
)
|
|
Retained earnings
|
|
74,566
|
|
|
87,693
|
|
|
Total stockholders' equity
|
|
463,485
|
|
|
475,930
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
881,286
|
|
|
$
|
824,677
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
May 2, 2015
|
|
May 3, 2014
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(8,637
|
)
|
|
$
|
(18,794
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation, amortization and impairment of long-lived assets
|
|
16,916
|
|
|
15,218
|
|
|
Loss on retirements of property, equipment and leasehold improvements
|
|
148
|
|
|
677
|
|
|
Deferred income taxes
|
|
(149
|
)
|
|
(420
|
)
|
|
Tax benefit from stock-based compensation
|
|
692
|
|
|
280
|
|
|
Stock-based compensation expense
|
|
2,709
|
|
|
1,626
|
|
|
Amortization of debt issuance costs
|
|
55
|
|
|
75
|
|
|
Excess tax benefits from stock-based compensation
|
|
(910
|
)
|
|
(815
|
)
|
|
Deferred compensation obligation
|
|
97
|
|
|
38
|
|
|
Amortization of employee benefit related costs
|
|
179
|
|
|
100
|
|
|
Construction allowances from landlords
|
|
1,072
|
|
|
2,425
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Increase in merchandise inventories
|
|
(45,253
|
)
|
|
(15,140
|
)
|
|
Decrease (increase) in other assets
|
|
2,738
|
|
|
(8,548
|
)
|
|
Increase in accounts payable and other liabilities
|
|
13,911
|
|
|
17,156
|
|
|
Net cash used in operating activities
|
|
(16,432
|
)
|
|
(6,122
|
)
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Additions to property, equipment and leasehold improvements
|
|
(13,295
|
)
|
|
(14,714
|
)
|
|
Proceeds from disposal of assets
|
|
14
|
|
|
1,397
|
|
|
Net cash used in investing activities
|
|
(13,281
|
)
|
|
(13,317
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from revolving credit facility borrowings
|
|
116,311
|
|
|
116,340
|
|
|
Payments of revolving credit facility borrowings
|
|
(71,665
|
)
|
|
(86,020
|
)
|
|
Payments of long-term debt obligations
|
|
(985
|
)
|
|
(1,200
|
)
|
|
Payments for stock related compensation
|
|
(3,470
|
)
|
|
(1,955
|
)
|
|
Proceeds from exercise of stock awards
|
|
543
|
|
|
5,010
|
|
|
Excess tax benefits from stock-based compensation
|
|
910
|
|
|
815
|
|
|
Cash dividends paid
|
|
(4,490
|
)
|
|
(3,952
|
)
|
|
Net cash provided by financing activities
|
|
37,154
|
|
|
29,038
|
|
|
Net increase in cash and cash equivalents
|
|
7,441
|
|
|
9,599
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
Beginning of period
|
|
17,165
|
|
|
14,762
|
|
|
End of period
|
|
$
|
24,606
|
|
|
$
|
24,361
|
|
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