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Saks Incorporated Announces Results For The Second Quarter And Six Months Ended July 28, 2012

Consistent with many other retail companies, Saks will no longer report monthly comparable store sales results on a go-forward basis.

Conference Call Information

Management has scheduled a conference call at 9:30 a.m. Eastern Time on Tuesday, August 14, 2012 to discuss results for the second quarter and six months ended July 28, 2012. To participate, please call (201) 689-8874 (10 minutes prior to the call). A replay of the call will be available for 48 hours following the live call. The dial-in number for the replay is (201) 612-7415 (account number 378; conference ID number 383741).

Interested parties also have the opportunity to listen to the conference call over the Internet by visiting the Investor Relations section of Saks Incorporated’s corporate website at http://phx.corporate-ir.net/phoenix.zhtml?c=110111&p=irol-irhome. To listen to the live call, please go to the address listed at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call, and a transcript will be posted on the Company’s web site within 24 to 48 hours.

To be placed on the Company’s e-mail notification list for press releases, SEC filings, certain analytical information, and/or upcoming events, please go to www.saksincorporated.com, click on “Investor Relations,” click on “E-mail Alerts,” and fill out the requested information.

About the Company

The Company currently operates 45 Saks Fifth Avenue stores, 63 Saks Fifth Avenue OFF 5TH stores, and saks.com. Saks Fifth Avenue is proud to be named a J.D. Power and Associates 2012 Customer Service Champion and is only one of 50 U.S. companies so named.

Forward-looking Information

The information contained in this press release that addresses future results or expectations is considered “forward-looking” information within the definition of the Federal securities laws. Forward-looking information in this document can be identified through the use of words such as “may,” “will,” “intend,” “plan,” “project,” “expect,” “anticipate,” “should,” “would,” “believe,” “estimate,” “contemplate,” “possible,” and “point.” The forward-looking information is premised on many factors, some of which are outlined below. Actual consolidated results might differ materially from projected forward-looking information.

The forward-looking information and statements are or may be based on a series of projections and estimates and involve risks and uncertainties. These risks and uncertainties include such factors as: the level of consumer spending for luxury apparel and other merchandise carried by the Company and its ability to respond quickly to consumer trends; macroeconomic conditions and their effect on consumer spending; the Company’s ability to secure adequate financing; adequate and stable sources of merchandise; the competitive pricing environment within the retail sector; the effectiveness of planned advertising, marketing, and promotional campaigns; favorable customer response to relationship marketing efforts of proprietary credit card loyalty programs; appropriate inventory management; effective expense control; successful operation of the Company’s proprietary credit card strategic alliance with Capital One Financial Corporation; geo-political risks; the performance of the financial markets; changes in interest rates; and fluctuations in foreign currency and exchange rates. For additional information regarding these and other risk factors, please refer to the Company’s filings with the SEC, including its Annual Report on Form 10-K/A for the fiscal year ended January 28, 2012, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K, which may be accessed via the Internet at www.sec.gov .

The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events, or otherwise.

             
SAKS INCORPORATED & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except per share amounts)
 
(UNAUDITED)
Three Months Ended
July 28, 2012 July 30, 2011
 
Net sales $ 704,115 100.0 % $ 670,180 100.0 %
Cost of sales   442,034   62.8 %   415,635   62.0 %
Gross margin 262,081 37.2 % 254,545 38.0 %
 
Selling, general and administrative expenses 190,730 27.1 % 183,444 27.4 %
Other operating expenses:
Property and equipment rentals 26,082 3.7 % 24,896 3.7 %
Depreciation and amortization 30,222 4.3 % 28,868 4.3 %
Taxes other than income taxes 21,007 3.0 % 20,595 3.1 %
Store pre-opening costs 3,217 0.5 % 413 0.1 %
Impairments and dispositions   4,680   0.7 %   166   0.0 %
Operating loss (13,857 ) -2.0 % (3,837 ) -0.6 %
 
Other income (expense):
Interest expense (9,552 ) -1.4 % (13,043 ) -1.9 %
Other income, net   624   0.1 %   463   0.1 %
Loss before income taxes (22,785 ) -3.2 % (16,417 ) -2.4 %
 
Benefit for income taxes   (10,488 ) -1.5 %   (8,048 ) -1.2 %
Net loss $ (12,297 ) -1.7 % $ (8,369 ) -1.2 %
 

Loss per share:

Basic $ (0.08 ) $ (0.05 )
Diluted $ (0.08 ) $ (0.05 )
 
Weighted-average common shares:
Basic 151,231 156,733
Diluted 151,231 156,733
 
             
SAKS INCORPORATED & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except per share amounts)
 
(UNAUDITED)
Six Months Ended
July 28, 2012 July 30, 2011
 
Net sales $ 1,457,722 100.0 % $ 1,396,178 100.0 %
Cost of sales   861,176   59.1 %   821,699   58.9 %
Gross margin 596,546 40.9 % 574,479 41.1 %
 
Selling, general and administrative expenses 380,754 26.1 % 361,815 25.9 %
Other operating expenses:
Property and equipment rentals 52,243 3.6 % 50,237 3.6 %
Depreciation and amortization 59,072 4.1 % 58,092 4.2 %
Taxes other than income taxes 44,385 3.0 % 44,158 3.2 %
Store pre-opening costs 4,063 0.3 % 547 0.0 %
Impairments and dispositions   4,990   0.3 %   3,034   0.2 %
Operating income 51,039 3.5 % 56,596 4.1 %
 
Other income (expense):
Interest expense (18,959 ) -1.3 % (26,639 ) -1.9 %
Loss on extinguishment of debt - 0.0 % (539 ) 0.0 %
Other income, net   1,447   0.1 %   996   0.1 %
Income before income taxes 33,527 2.3 % 30,414 2.2 %
 
Provision for income taxes   13,679   0.9 %   10,374   0.7 %
Net income $ 19,848   1.4 % $ 20,040   1.4 %
 
Earnings per share:
Basic $ 0.13 $ 0.13
Diluted $ 0.13 $ 0.12
 
Weighted-average common shares:
Basic 152,955 156,568
Diluted 155,936 160,682
 
         
SAKS INCORPORATED & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
 
(UNAUDITED)
July 28, July 30,
2012 2011
ASSETS
Current assets
Cash and cash equivalents $ 138,981 $ 293,977
Merchandise inventories 749,087 689,223
Other current assets 86,852 83,492
Deferred income taxes, net   99,407   66,434
Total current assets 1,074,327 1,133,126
 
Property and equipment, net 872,070 872,372
Deferred income taxes, net 121,602 161,070
Other assets   24,816   28,583
TOTAL ASSETS $ 2,092,815 $ 2,195,151
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $ 132,990 $ 143,593
Accrued expenses and other current liabilities 263,993 220,078
Current portion of long-term debt   8,905   148,464
Total current liabilities 405,888 512,135
 
Long-term debt 374,348 364,132
Other long-term liabilities   161,389   138,050
Total liabilities 941,625 1,014,317
Commitments and contingencies
Shareholders' equity   1,151,190   1,180,834
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,092,815 $ 2,195,151




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