Saks (SKS) is expected to report Q3 earnings before market open Tuesday, November 18, with a conference call scheduled for 10:00 am ET.
Analysts are looking for a loss of (3c) on revenue of $712.73M. The consensus range is (10c) to 3c for EPS, and revenue of $692.7M to $803M, according to First Call. The company recently reported October sales of $219M with same-store sales down 16.6%. U.S. consumers have stayed away from department stores for months as rising food and fuel prices put pressure on budgets hurt by job losses, the credit crunch and the turmoil in the housing market. Instead of spending at department stores, consumers are flocking to wholesale clubs and discount apparel chains. Additionally,t he company recently announced plans to discontinue the operations of its Club Libby Lu specialty store business.
Lazard said that while Saks is doing an "admirable job" outperforming peers like Macy's (M), as long as the stock market remains volatile, the "luxury customer" is at a standstill. The firm expects margins to remain pressured -- as comparable inventories are higher than comparable sales -- until the second half of 2009. The firm sees Q4 SSS down 16% and November SSS in the 35% range, though it believes the company is well-positioned due to efforts by CEO Stephen Sadove and is "poised for significant upside" on when the recession is over.