Saks posts improved Q1 earnings

NEW YORK For the first quarter ended May 1, Saks recorded net income of $18.8 million, or 11 cents per diluted share. For the first quarter ended May 2, 2009, the company posted a net loss of $5.1 million, or 4 cents per share.

Stephen Sadove, chairman and CEO, noted, "I am very pleased with our first quarter operating performance. These results exceeded our expectations and were driven by comparable store sales growth, gross margin expansion, and expense leverage. The Saks team has carefully navigated through the challenging environment, and we are now moving cautiously from defense to offense."

"Our 6.1% first quarter comparable store sales increase was generated in a period during which we strategically reduced our promotional activity."

In the Saks Fifth Avenue stores, several merchandise categories showed strength during the quarter, including women’s and men’s apparel, handbags, shoes and jewelry, the company reported. For the quarter, the New York City flagship-store sales performance continued to exceed the company’s aggregate comparable-store sales performance, Saks reported.

Sadove noted, “We remain optimistic about the long-term outlook for our company and for the luxury sector as a whole. While our first quarter results exceeded our expectations, we still believe the overall environment remains uncertain, and we are approaching the remainder of 2010 with continued caution. However, our assumptions for the balance of the year reflect a somewhat stronger forecast than we had at the beginning of the year.”

The company expects comparable store sales growth in the mid-single digit range for the full year, comprised of low-to-mid-single digit growth in the second quarter and mid-single digit growth in the second half of the fiscal year.