Luxury Sales Drive Saks' Profit

High-end retailer Saks ( SKS) said Wednesday that fourth-quarter earnings increased as consumer spending continued to surge in the luxury realm.

Including certain charges, the company earned $81.8 million, or 57 cents a share, compared with $68.1 million, or 47 cents a share, a year earlier. Operating income was $168.3 million, compared with $138.3 million a year ago.

Excluding the items, quarterly profit was 70 cents a share, which beat analysts' consensus for 68 cents a share.

Total revenue increased 6.9% to $1.97 billion in the quarter, while same-store sales at the company increased 5.9%. In a separate release, the company said same-store sales in February jumped 14.1%, with a 16.1% increase in total sales to $426.1 million.

Saks said gross margins increased 190 basis points in the quarter, which was offset by a $75 million increase in expenses and a $10.5 million debt restructuring charge.

For 2004, the company sees "moderate" same-store sales growth; gross margin rate improvement; and capital spending between $225 million to $250 million. The company will replace or open five new stores.

Separately, Saks said it appointed Steve Sadove, currently vice chairman of Saks Incorporated, to the additional post of chief operating officer.

Shares of Saks were currently down 10 cents, or 0.6%, at $17.49 in premarket trading.

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