Stage stores acts on growth strategy

Stage Stores' approach to operating department stores in small to mid-sized towns enabled the company to grow holiday season sales and profits faster than some of its big city rivals.

The company’s 853 departments stores, operating under the banners of Bealls, Goody’s, Palais Royal, Peebles and Stage, grew sales 6.6% to $525 million and profits from continuing operations increased 35% to $43.7 million during the fourth quarter ended Jan. 31. Same store sales increased 6.4% and the company’s e-commerce business grew 30%.

“Our merchandise margins expanded significantly, inventories ended in terrific shape from both a level and content perspective, and our fourth quarter profitability grew 35%,” said Stage Stores president and CEO Michael Glazer. “We plan to build upon our success with several key priorities for 2015, including driving improved store productivity, expanding our omnichannel capabilities and direct-to-consumer sales, upgrading our store base through remodels, and building a service culture focused on our customers. As we execute on these initiatives we believe we can drive long term earnings growth and shareholder value.”

The company’s offering of moderately priced, nationally recognized brand name and private label apparel, accessories, cosmetics, footwear and home goods saw gross margins expand to 32.6% in the fourth quarter from 30% the prior year.The fourth quarter strength offset weakness earlier in the year as full year sales increased a modest 1.8% to $1.64 billion and same store sales increased 1.4%.

The company opened three stores and closed four stores during the quarter bringing its full year totals to 18 stores opened and 12 stores closed. Those ratios will reverse in 2015 with Stage Stores planning to close between 10 and 20 locations while opening only two new stores.

The loss of square footage combined with expectations for same store sales to be flat to up 2% means sales have the potential for moderate growth this year. The company said it expects total sales to range from the $1.64 billion achieved last year to $1,675. Profits are expected to grow faster, ranger from $1.20 to $1.28 compared to 96 cents last year.