In a Nutshell: Blaming foot traffic, Stage Stores reported a disappointing quarter for its department stores. The company’s off-price concept, however, picked up additional steam. As a result, Stage Stores continues to expand its Gordmans off-price chain, which the retailer picked up in a bankruptcy auction in March 2017.
The group added a Gordman’s location during the quarter and converted eight full-line stores to that concept, and president and CEO Michael Glazer signaled the possibility for more, saying the company has the formula down now and is “tremendously excited by conversion opportunities in 2019 and beyond.”
While men’s and children’s apparel showed “great momentum” in off-price, home outperformed clothing across both chains. The retailer is looking to capitalize on the vacuum left by Toys R Us, Babies R Us and the Bon-Ton stores over the holidays with its assortment of toys, baby gear and brand name goods.
Stage Stores anticipates comparable store sales for the full year of down 1.5 percent to down 0.5 percent with a net loss of $59 million to $54 million.
Sales: Stage Stores reported net sales of $347 million during the quarter compared to $357 million during the same period in 2017.
Comparable store sales decreased by 2.8 percent company wide. Off-price comp sales were up 9.9 percent but were dragged down by a 5.5 percent decrease in its department store division.
The company saw double-digit sales growth online, giving it Stage Stores’ “biggest increases ever.”
Earnings: The retail group reported a net loss for the quarter of $31.4 million, or a loss per share of $1.11, compared to a net loss of $17.7 million, or a loss of 64 cents, during the prior-year period.
CEO’s Take: “While the department store side remains under pressure, we are elevating our guest experience by offering her more of the non-apparel merchandise that she wants, making it easier for her to shop through omnichannel initiatives and creating a unique treasure hunt with our pop-up shops… The off-price business continues to grow and has incredible upside potential, especially with the lower volume stores, more than doubling their sales after conversion,” Glazer said.