Stage Stores, Inc. (NYSE: SSI) today reported financial results for the
third quarter ended October 31, 2015. Sales and comparable sales each
decreased 3.5%. On an adjusted basis, the Company reported a net loss of
$9.4 million, or $0.29 per diluted share compared to an adjusted net
loss of $0.16 per diluted share in the prior year.
“Our third quarter results were negatively impacted by stores located in
geographies which were pressured by oil and gas and a devalued peso.
Stores outside of those areas achieved a flat comp for the quarter,”
said Michael Glazer, President and Chief Executive Officer. “Based on
these results and our expectation that these challenges will continue in
the near term, we are guiding our comp sales to a range of -2% to -4%
for the fourth quarter and adjusted earnings per diluted share to $0.70
to $0.80 for the fiscal year. We will manage our business with
discipline around inventory control, implement additional cost
reductions and maintain our focus on improving store productivity and
driving online sales. Overall, we continue to believe that our strategic
initiatives around e-commerce, an increased emphasis on merchandise
style and value, a rationalized store base, store remodels, and
rejuvenated marketing programs will better position us for sustainable
long-term growth.”
Third Quarter Reported Results
Sales decreased 3.5% to $351.6 million for the third quarter, as
compared to $364.2 million in the prior year period. Comparable sales
decreased 3.5%. Net loss was $10.2 million, or $0.32 per diluted share,
versus $0.16 per diluted share for the prior year.
On an adjusted basis, net loss was $9.4 million, or $0.29 per diluted
share, for the third quarter. Adjusted third quarter results exclude
charges associated with the consolidation of the Company’s headquarters
and asset disposals associated with our store remodel program of
approximately $1.5 million, or $0.03 per diluted share.
Share Repurchase Program
The Company also announced today that its Board of Directors approved
the resumption of the $200 million share repurchase program authorized
in 2011. The Company has $99.9 million remaining under the program.
Mr. Glazer commented, “The Board’s decision reflects confidence in the
Company’s future growth and cash flow generation. At current levels, we
believe the share price does not reflect Stage’s intrinsic value, making
this an opportune time to resume our share repurchases.”
Under the program, the Company has the discretion to repurchase its
common shares in the open market and/or in privately negotiated
transactions. The extent to which the Company repurchases its common
shares under the program, and the timing of such repurchases, will
depend on market conditions, regulatory considerations and other
factors. Purchases under the program will be financed by existing cash,
cash flow or other liquidity sources. The program is eligible to begin
on November 20, 2015 with no expiration date and may be suspended or
discontinued at any time. Any common shares acquired will be available
to meet obligations under equity compensation plans and for general
corporate purposes.
Conference Call / Webcast Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time
to discuss its third quarter results. Interested parties may 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, December 4, 2015.
About Stage Stores
Stage Stores, Inc. operates 847 specialty department stores in 40 states
and a 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.
Use of Adjusted (Non-GAAP) Financial Measures
The Company reports its financial results in accordance with generally
accepted accounting principles (GAAP). However, management believes that
certain non-GAAP financial measures help to facilitate comparisons of
Company operating performance across periods. This release includes
non-GAAP financial measures identified as “adjusted” results. A
reconciliation of all non-GAAP financial measures to the most comparable
GAAP financial measures is provided in a table included with this
release.
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
|
|
|
|
October 31, 2015
|
|
November 1, 2014
|
|
|
|
Amount
|
|
% to Sales (a)
|
|
Amount
|
|
% to Sales (a)
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
351,575
|
|
|
100.0
|
%
|
|
$
|
364,197
|
|
|
100.0
|
%
|
|
Cost of sales and related buying, occupancy and distribution expenses
|
|
275,479
|
|
|
78.4
|
%
|
|
276,031
|
|
|
75.8
|
%
|
|
Gross profit
|
|
76,096
|
|
|
21.6
|
%
|
|
88,166
|
|
|
24.2
|
%
|
|
Selling, general and administrative expenses
|
|
92,079
|
|
|
26.2
|
%
|
|
94,652
|
|
|
26.0
|
%
|
|
Store opening costs
|
|
17
|
|
|
—
|
%
|
|
998
|
|
|
0.3
|
%
|
|
Interest expense
|
|
743
|
|
|
0.2
|
%
|
|
814
|
|
|
0.2
|
%
|
|
Loss from continuing operations before income tax
|
|
(16,743
|
)
|
|
(4.8
|
)%
|
|
(8,298
|
)
|
|
(2.3
|
)%
|
|
Income tax benefit
|
|
(6,560
|
)
|
|
(1.9
|
)%
|
|
(3,191
|
)
|
|
(0.9
|
)%
|
|
Loss from continuing operations
|
|
(10,183
|
)
|
|
(2.9
|
)%
|
|
(5,107
|
)
|
|
(1.4
|
)%
|
|
Loss from discontinued operations, net of tax benefit of $65
|
|
—
|
|
|
—
|
%
|
|
(161
|
)
|
|
—
|
%
|
|
Net loss
|
|
$
|
(10,183
|
)
|
|
(2.9
|
)%
|
|
$
|
(5,268
|
)
|
|
(1.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share data:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.32
|
)
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
Discontinued operations
|
|
—
|
|
|
|
|
(0.01
|
)
|
|
|
|
Basic loss per share
|
|
$
|
(0.32
|
)
|
|
|
|
$
|
(0.17
|
)
|
|
|
|
Basic weighted average shares outstanding
|
|
32,017
|
|
|
|
|
31,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share data:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.32
|
)
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
Discontinued operations
|
|
—
|
|
|
|
|
(0.01
|
)
|
|
|
|
Diluted loss per share
|
|
$
|
(0.32
|
)
|
|
|
|
$
|
(0.17
|
)
|
|
|
|
Diluted weighted average shares outstanding
|
|
32,017
|
|
|
|
|
31,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Percentages may not foot due to rounding.
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(in thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
October 31, 2015
|
|
November 1, 2014
|
|
|
|
Amount
|
|
% to Sales (a)
|
|
Amount
|
|
% to Sales (a)
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,101,804
|
|
|
100.0
|
%
|
|
$
|
1,113,683
|
|
|
100.0
|
%
|
|
Cost of sales and related buying, occupancy and distribution expenses
|
|
846,324
|
|
|
76.8
|
%
|
|
835,236
|
|
|
75.0
|
%
|
|
Gross profit
|
|
255,480
|
|
|
23.2
|
%
|
|
278,447
|
|
|
25.0
|
%
|
|
Selling, general and administrative expenses
|
|
281,387
|
|
|
25.5
|
%
|
|
283,814
|
|
|
25.5
|
%
|
|
Store opening costs
|
|
396
|
|
|
—
|
%
|
|
2,030
|
|
|
0.2
|
%
|
|
Interest expense
|
|
1,995
|
|
|
0.2
|
%
|
|
2,293
|
|
|
0.2
|
%
|
|
Loss from continuing operations before income tax
|
|
(28,298
|
)
|
|
(2.6
|
)%
|
|
(9,690
|
)
|
|
(0.9
|
)%
|
|
Income tax benefit
|
|
(11,093
|
)
|
|
(1.0
|
)%
|
|
(3,729
|
)
|
|
(0.3
|
)%
|
|
Loss from continuing operations
|
|
(17,205
|
)
|
|
(1.6
|
)%
|
|
(5,961
|
)
|
|
(0.5
|
)%
|
|
Loss from discontinued operations, net of tax benefit of $4,322
|
|
—
|
|
|
—
|
%
|
|
(6,909
|
)
|
|
(0.6
|
)%
|
|
Net loss
|
|
$
|
(17,205
|
)
|
|
(1.6
|
)%
|
|
$
|
(12,870
|
)
|
|
(1.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share data:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.54
|
)
|
|
|
|
$
|
(0.19
|
)
|
|
|
|
Discontinued operations
|
|
—
|
|
|
|
|
(0.22
|
)
|
|
|
|
Basic loss per share
|
|
$
|
(0.54
|
)
|
|
|
|
$
|
(0.41
|
)
|
|
|
|
Basic weighted average shares outstanding
|
|
31,917
|
|
|
|
|
31,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share data:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.54
|
)
|
|
|
|
$
|
(0.19
|
)
|
|
|
|
Discontinued operations
|
|
—
|
|
|
|
|
(0.22
|
)
|
|
|
|
Diluted loss per share
|
|
$
|
(0.54
|
)
|
|
|
|
$
|
(0.41
|
)
|
|
|
|
Diluted weighted average shares outstanding
|
|
31,917
|
|
|
|
|
31,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Percentages may not foot due to rounding.
|
|
|
|
|
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands, except par value)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
October 31, 2015
|
|
January 31, 2015
|
|
ASSETS
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
23,434
|
|
|
$
|
17,165
|
|
|
Merchandise inventories, net
|
|
617,258
|
|
|
441,452
|
|
|
Prepaid expenses and other current assets
|
|
46,849
|
|
|
45,444
|
|
|
Total current assets
|
|
687,541
|
|
|
504,061
|
|
|
|
|
|
|
|
|
Property, equipment and leasehold improvements, net
|
|
308,034
|
|
|
285,450
|
|
|
Intangible asset
|
|
14,910
|
|
|
14,910
|
|
|
Other non-current assets, net
|
|
21,996
|
|
|
20,256
|
|
|
Total assets
|
|
$
|
1,032,481
|
|
|
$
|
824,677
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Accounts payable
|
|
$
|
241,549
|
|
|
$
|
121,778
|
|
|
Accrued expenses and other current liabilities
|
|
70,393
|
|
|
83,004
|
|
|
Total current liabilities
|
|
311,942
|
|
|
204,782
|
|
|
|
|
|
|
|
|
Long-term debt obligations
|
|
172,042
|
|
|
45,673
|
|
|
Other long-term liabilities
|
|
96,864
|
|
|
98,292
|
|
|
Total liabilities
|
|
580,848
|
|
|
348,747
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.01, 100,000 shares authorized, 32,020 and
31,632 shares issued, respectively
|
|
320
|
|
|
316
|
|
|
Additional paid-in capital
|
|
402,018
|
|
|
395,395
|
|
|
Less treasury stock - at cost, 0 and 0 shares, respectively
|
|
(763
|
)
|
|
(600
|
)
|
|
Accumulated other comprehensive loss
|
|
(6,514
|
)
|
|
(6,874
|
)
|
|
Retained earnings
|
|
56,572
|
|
|
87,693
|
|
|
Total stockholders' equity
|
|
451,633
|
|
|
475,930
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,032,481
|
|
|
$
|
824,677
|
|
|
Stage Stores, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
October 31, 2015
|
|
November 1, 2014
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(17,205
|
)
|
|
$
|
(12,870
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation, amortization and impairment of long-lived assets
|
|
58,326
|
|
|
46,896
|
|
|
Loss on retirements of property, equipment and leasehold improvements
|
|
712
|
|
|
854
|
|
|
Deferred income taxes
|
|
(557
|
)
|
|
(451
|
)
|
|
Tax benefit from stock-based compensation
|
|
540
|
|
|
109
|
|
|
Stock-based compensation expense
|
|
8,926
|
|
|
7,018
|
|
|
Amortization of debt issuance costs
|
|
164
|
|
|
220
|
|
|
Excess tax benefits from stock-based compensation
|
|
(945
|
)
|
|
(829
|
)
|
|
Deferred compensation obligation
|
|
163
|
|
|
(104
|
)
|
|
Amortization of employee benefit related costs
|
|
581
|
|
|
299
|
|
|
Construction allowances from landlords
|
|
2,127
|
|
|
5,529
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Increase in merchandise inventories
|
|
(175,806
|
)
|
|
(140,569
|
)
|
|
Increase in other assets
|
|
(3,335
|
)
|
|
(3,500
|
)
|
|
Increase in accounts payable and other liabilities
|
|
95,476
|
|
|
93,021
|
|
|
Net cash used in operating activities
|
|
(30,833
|
)
|
|
(4,377
|
)
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Additions to property, equipment and leasehold improvements
|
|
(69,156
|
)
|
|
(48,308
|
)
|
|
Proceeds from disposal of assets
|
|
37
|
|
|
1,468
|
|
|
Net cash used in investing activities
|
|
(69,119
|
)
|
|
(46,840
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from revolving credit facility borrowings
|
|
428,783
|
|
|
331,518
|
|
|
Payments of revolving credit facility borrowings
|
|
(304,960
|
)
|
|
(262,970
|
)
|
|
Payments of long-term debt obligations
|
|
(1,466
|
)
|
|
(2,017
|
)
|
|
Payments of debt issuance costs
|
|
—
|
|
|
(634
|
)
|
|
Repurchases of common stock
|
|
—
|
|
|
(5
|
)
|
|
Payments for stock related compensation
|
|
(3,708
|
)
|
|
(2,038
|
)
|
|
Proceeds from exercise of stock awards
|
|
543
|
|
|
5,041
|
|
|
Excess tax benefits from stock-based compensation
|
|
945
|
|
|
829
|
|
|
Cash dividends paid
|
|
(13,916
|
)
|
|
(12,483
|
)
|
|
Net cash provided by financing activities
|
|
106,221
|
|
|
57,241
|
|
|
Net increase in cash and cash equivalents
|
|
6,269
|
|
|
6,024
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
Beginning of period
|
|
17,165
|
|
|
14,762
|
|
|
End of period
|
|
$
|
23,434
|
|
|
$
|
20,786
|
|
|
Stage Stores, Inc.
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
(in thousands, except earnings per share)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
October 31, 2015
|
|
November 1, 2014
|
|
October 31, 2015
|
|
November 1, 2014
|
|
Net loss (GAAP)
|
|
$
|
(10,183
|
)
|
|
$
|
(5,268
|
)
|
|
$
|
(17,205
|
)
|
|
$
|
(12,870
|
)
|
|
Loss from discontinued operations
|
|
—
|
|
|
161
|
|
|
—
|
|
|
6,909
|
|
|
Loss from continuing operations
|
|
(10,183
|
)
|
|
(5,107
|
)
|
|
(17,205
|
)
|
|
(5,961
|
)
|
|
Corporate headquarters consolidation, net of tax of $522 and $761,
respectively
|
|
791
|
|
|
—
|
|
|
1,180
|
|
|
—
|
|
|
Strategic store closures and remodels, net of tax of $170 and
$3,463, respectively
|
|
13
|
|
|
—
|
|
|
5,371
|
|
|
—
|
|
|
Adjusted loss (non-GAAP)
|
|
$
|
(9,379
|
)
|
|
$
|
(5,107
|
)
|
|
$
|
(10,654
|
)
|
|
$
|
(5,961
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share (GAAP)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.41
|
)
|
|
Loss from discontinued operations
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.22
|
|
|
Loss from continuing operations
|
|
(0.32
|
)
|
|
(0.16
|
)
|
|
(0.54
|
)
|
|
(0.19
|
)
|
|
Corporate headquarters consolidation
|
|
0.03
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
|
Strategic store closures and remodels
|
|
—
|
|
|
—
|
|
|
0.17
|
|
|
—
|
|
|
Adjusted diluted loss per share (non-GAAP)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.19
|
)
|
|
|
|
Three Months Ended
|
|
|
|
October 31, 2015
|
|
November 1, 2014
|
|
|
|
Amount
|
|
% to Sales (a)
|
|
Amount
|
|
% to Sales (a)
|
|
Selling, general and administrative expenses (GAAP)
|
|
$
|
92,079
|
|
|
26.2
|
%
|
|
$
|
94,652
|
|
|
26.0
|
%
|
|
Store opening costs (GAAP)
|
|
17
|
|
|
—
|
%
|
|
998
|
|
|
0.3
|
%
|
|
Interest expense (GAAP)
|
|
743
|
|
|
0.2
|
%
|
|
814
|
|
|
0.2
|
%
|
|
Corporate headquarters consolidation
|
|
(1,313
|
)
|
|
(0.4
|
)%
|
|
—
|
|
|
—
|
%
|
|
Strategic store closures and remodels
|
|
(183
|
)
|
|
(0.1
|
)%
|
|
—
|
|
|
—
|
%
|
|
Adjusted expenses (non-GAAP)
|
|
$
|
91,343
|
|
|
26.0
|
%
|
|
$
|
96,464
|
|
|
26.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(a) Percentages may not foot due to rounding.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151119005374/en/
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