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Stage Stores Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: December 7, 2011 02:52PM

Stage Stores Inc. (SSI) filed Quarterly Report for the period ended 2011-10-29. Stage Stores Inc. has a market cap of $411.9 million; its shares were traded at around $13.24 with a P/E ratio of 16.9 and P/S ratio of 0.3. The dividend yield of Stage Stores Inc. stocks is 2.8%.



Highlight of Business Operations:

The sales increase was driven primarily by the strength of the Company s new stores as comparable store sales, which are sales in stores that are open for at least 14 full months prior to the reporting period, decreased by 0.6% in the current year third quarter as compared to a 0.3% decrease in the prior year third quarter. During the current year third quarter, the number of transactions increased 0.6%, offset by a 1.2% decrease in average transaction value. The decrease in average transaction value resulted from a 0.4% increase in average unit retail, offset by a 1.6% decrease in units per transaction.

On a merchandise category basis, the Company experienced comparable store sales increases in a number of key merchandise categories (i.e., those categories comprising greater than 5% of sales). Cosmetics, children s, junior sportswear and footwear all had comparable store sales that outperformed the Company s comparable store sales results during the current year third quarter. The Company continues to focus on growing its cosmetics line of business through the installation of Estee Lauder and Clinique counters, as 1 new Estee Lauder and 1 new Clinique counters were opened during the current year third quarter, which raised the total number of counters to 186 and 177, respectively.

The sales increase was driven primarily by the strength of the Company s new stores. Comparable store sales, which are sales in stores that are open for at least 14 full months prior to the reporting period, including the Goody s rebranded stores, increased by 0.2% in the current year as compared to a 0.9% decrease in the prior year. During the current year, the number of transactions increased 2.4%, partially offset by a 2.2% decrease in average transaction value. The decrease in average transaction value resulted from a 2.8% decline in average unit retail, partially offset by a 0.6% increase in units per transaction.

On a merchandise category basis, the Company experienced comparable store sales increases in a number of key merchandise categories (i.e., those categories comprising greater than 5% of sales). Children s, cosmetics, junior sportswear and footwear all had comparable store sales that outperformed the Company s comparable store sales results during the current year. The Company continues to focus on growing its cosmetics line of business through the installation of Estee Lauder and Clinique counters, as 10 new Estee Lauder and 8 new Clinique counters were opened during the current year, which raised the total number of counters to 186 and 177, respectively.

Historically, the Company's business is seasonal and sales are traditionally lower during the first three quarters of the fiscal year (February through October) and higher during the last quarter of the fiscal year (November through January). The fourth quarter usually accounts for slightly more than 30% of the Company's annual sales, with the other quarters accounting for approximately 22% to 24% each. Working capital requirements fluctuate during the year and generally reach their highest levels during the third and fourth quarters. The Company has begun to experience increases in its merchandise costs, particularly in those classifications that are heavily cotton-based, as well as higher freight costs. These inflationary increases are expected to continue for the remainder of 2011. The Company has taken steps to mitigate the effects of these increases through earlier receipt of certain product categories, adjusting merchandise assortment mix and adjusting price points. However, the Company does not believe that inflation had a material effect on its results of operations during the thirty-nine weeks ended October 29, 2011 and October 30, 2010, respectively. However, there can be no assurance that the Company's business will not be affected by inflation in the future.

Read the The complete Report



Stocks Discussed: SSI,
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