Stage Stores to shutter 90 locations

Houston —Stage Stores Inc. plans to close 90 underperforming stores, representing 4% of total sales, after a disappointing second quarter that missed Wall Street expectations for profit and revenue. The retailer expects the closures to enhance its capital efficiency, deliver higher productivity and be accretive to earnings.

The 90 closings include 27 stores expected to be shut down during fiscal 2015. Stage also plans to open three new stores during the fiscal year.

During the second quarter of fiscal 2015, net earnings plummeted 86% to $1.61 million from $11.19 million the same quarter the previous fiscal year. Charges associated with headquarters consolidation and store closure impairment drove the sharp decline in profit. Net sales rose a modest 0.9% to $380.92 million from $377.45 million. Same-store sales climbed 0.8%.

“While we delivered a positive comp, second quarter earnings fell short of our expectation,” said Michael Glazer, president and CEO. “We were challenged by the impact of a weaker peso and economic softness in parts of Texas, Louisiana, Oklahoma, and New Mexico. Our earnings decline over the prior year was driven by a decrease in merchandise margin as we accelerated markdowns on seasonal categories.”

Stage Stores has revised previously issued guidance downward. The company now expects adjusted earnings of between $1.05 to $1.15 per diluted share, compared with previous guidance of $1.20 to $1.28 per diluted share. Same-storesales are projected to be flat, compared to the previous guidance range of flat to 2%