With an extra week of sales, better advertising, improved traffic, higher-end full-price merchandise sales and improvements in all locations, Saks Inc., parent of the Saks Fifth Avenue retail chain has reported 17% higher Q4 income of $21.5 million, or $0.14/share, swinging to profit from a $2.2m loss a year ago. Same store sales were up 9.9% in Q4 and 24.7% from February 2006-2007. Net 2006 sales reached $2.94 billion, up from $2.8b in 2005. CEO Steve Sadove says Saks is halfway through restructuring, having sold mid-level non-Saks stores for $2b to focus on a strong luxury market and 35-55 year-old women. After 450,000 shares repurchased, extinguishing $18m of debt and a 4$ dividend, Saks says operating margins will be 3% this year with a goal of 8% by 2010. Competitors Neiman-Marcus, Nordstrom's and Barney's/Jones Apparel have double digit operating margins. Shares rose nearly 6% to $19.82 on Wednesday.
Sources: Press Release, Motley Fool, Wall St. Journal, MarketWatch , SignOn San Diego, MSN Money
Commentary: Saks a private equity candidate? [bloggingstocks] • Saks Can't Compete In This Environment • US Income Inequality Grows, Favors Luxury Retailers Over Wal-Mart
Stocks/ETFs to watch: Saks Inc. (NYSE:SKS). Competitors: Nordstrom's (NYSE:JWN), Jones Apparel (NYSE:JNY) ETFs: PowerShares Dynamic Retail (NYSEARCA:PMR), SPDR Retail (NYSEARCA:XRT)
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