22 Aug Stage Stores Reports 1.8 Percent Q2 Comparable Sales Increase
Stage Stores, Inc. reported that for the second quarter, comparable sales increased 1.8 percent. Net loss was $23.9 million, and adjusted EBITDA was a loss of $0.1 million.
“Second quarter results reflect a significant milestone in the implementation of our 2019 and long-term strategies,” commented Michael Glazer, chief executive officer. “Our second quarter comparable sales increase reflects a 150 basis point benefit from off-price conversions as well as stabilization of our women’s apparel business. We were excited to see that total comparable sales growth was driven by increases in both average transaction value and number of transactions. Additionally, our liquidity improved more than $10 million from the end of the first quarter, and we continue to expect positive cash flow for the full year.
We are pleased with the continued momentum in August following the 500 basis point improvement in comparable store sales in the second quarter from the first quarter. In fact, comparable sales are up mid-single digits for the first two weeks of the third quarter, which further validates our pivot from department stores to off-price.”
Michael Glazer continued, “We now expect adjusted EBITDA of $20 million to $25 million compared to the $10 million to $15 million range that we previously expected. This is based on our accelerated conversion schedule and significant SG&A benefits now expected to be realized in the fall of 2019 rather than in 2020, as originally anticipated. Our current guidance also reflects revised comparable sales outlook of +1 percent to +3 percent, based on our spring season performance. With positive comparable sales, improved liquidity, increased earnings expectations and the recently announced acceleration of our off-price conversion strategy, we believe that the future is bright for Stage Stores and we look forward to executing in the third quarter, the holiday season, and beyond.”
Second Quarter Results
Second quarter 2019 results compared to second quarter 2018 results were as follows:
- Net sales were $368 million compared to $369 million
- Comparable sales increased 1.8 percent for total company, with off-price conversions benefiting comparable sales by 150 basis points
- Net loss was $23.9 million compared to net loss of $16.9 million
- Loss per share was $0.83 compared to loss per share of $0.60
- Adjusted EBITDA was $(0.1) million compared to adjusted EBITDA of $2.0 million
- Opened one new Gordmans off-price store and converted 35 department stores to Gordmans off-price, bringing the year to date conversion total to 72
2019 Guidance
For 2019, the company provided the following annual guidance:
- Net sales between $1,555 million and $1,585 million
- Comparable sales increase of 1 percent to 3 percent
- Adjusted EBITDA between $20 million and $25 million
- Net loss between $65 million and $60 million, and tax rate of 0 percent
- Loss per share between $2.25 and $2.10
- Convert 89 department stores to Gordmans off-price stores, open one new Gordmans stores, and close 55 to 60 department stores
- Capital expenditures of $30 million