Earnings Preview: Saks Incorporated

| About: Saks Incorporated (SKS)
Saks Incorporated (NYSE:SKS) is expected to report Q4 earnings Wednesday with a conference call scheduled for 10:00 a.m. ET.


Analysts are looking for a profit of 20c on revenue of $993.61M. The consensus range is 17c to 23c for EPS, and revenue of $985.6M to $1.03B, according to First Call. Saks recently reported January same store sales up 4.1% vs. consensus of up 2.2% and said it sees Q4 SSS growth in the high single digits. Saks said it continued to experience a more challenging macroeconomic and competitive environment, and consistent with trends commencing in the third quarter, customers have continued to shift more of their spending to promotional events.

Department stores have suffered recently on lower discretionary spending from consumers due to higher gas and food prices, as well as the weak housing and credit markets. Higher-end department stores such as Saks have mainly fared better than other department stores such as Macy's (NYSE:M).

Analyst Views

S&P analysts attributed the company's strong holiday sales performance relative to peers to its sharpened luxury merchandise focus, as well as greater consistency in products and increased local marketing efforts at branch stores. The firm upgraded shares to Buy from Hold in January. According to Women's Wear Daily, Baugur Group's bid for Saks is currently in a holding pattern. Some sources believe Baugur will buy Saks "outright" and others believe Baugur may take a minority stake.