Saks Q3 Results Beat Estimates; Holiday Sales Expected to Rise (SKS)

Saks Incorporated (NYSE: SKS), the New York City-based luxury retailer, today reported third-quarter financial results that beat estimates. The company also forecast continued sales growth in the holiday season.

Saks expects same store sales to increase by a mid-to-high single digit percentage rate in the final quarter, which includes the holiday season. For the third quarter, the company’s same store sales climbed 5.8%. Sales at the company’s Fifth Avenue flagship in Manhattan also grew by a similar amount. The Fifth Avenue flagship accounts for 20% of the company’s total sales.

Although Saks expects sales to continue to rise in the holiday season, the company’s October sales were lackluster, missing Wall Street estimates. The weaker than expected October sales also raised concerns that the volatility in stock markets is having a negative impact on luxury goods sales.

Steve Sadove, CEO of Saks Incorporated, said that the financial markets have been especially volatile of late, which has resulted in deceleration of the company’s sales trends. Sadove said that despite the volatility, the company’s core customers held up very well.

Saks reported a net profit of $17.8 million, or $0.11 per share for the third quarter, down from $36.3 million, or $0.20 per share reported for the same period in the previous year. The company’s third-quarter profit came in above Street estimates of $0.09 per share.

Saks’ gross margin for the quarter rose 160 basis points to 44.20%.

The better than expected earnings for the third quarter and a bullish outlook for the holiday season lifted Saks shares in trading today. The stock finished the day 1.67% higher at $10.37 on above average volume of 4.87 million after rising to an intra-day high of $10.58.

Saks shares have fallen more than 3% this year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.