Saks said sales rose 8.8 percent to $862.4 million from $792.7 million. Same-store sales were up 8.4 percent. The retailer was helped by beefed-up promotions, but said the weak economy would basically stall operating margins for the year. Earnings per share were 13 cents, compared with earnings of $11 million, or 7 cents, a year ago when special charges, among other things, related to the sale of the firm’s moderate department stores reduced profits by $17.6 million.
Stephen Sadove, chairman and chief executive officer, said the shopper responded to the chain’s offerings and ”incremental promotions.” Saks held a more extensive friends-and-family sale during the quarter and shifted a spring clearance event to April from May.
Despite being bullish on the long-term outlook for luxury, Sadove said the difficult economy would continue to restrain the retailer.
“We believe the challenging macroeconomic and promotional environment will continue for the balance of 2008 and that our 2008 operating margin, excluding certain items, will remain relatively flat with 2007,” said Sadove.
Meanwhile, Target Corp.’s first-quarter earnings fell to 74 cents a diluted share as revenues for the three months ended May 3 increased 5.4 percent to $14.8 billion. Comparable-store sales slid 0.7 percent.
Slowed by the tough economy, Gregg Steinhafel, president and ceo, said the company would stay on target.
“Though the current economic environment remains challenging, we will continue to generate long-term value for our shareholders by remaining focused on the disciplined execution of our strategy,” said Steinhafel.
The firm also said it completed the sale of about half of its credit card receivables for roughly $3.6 billion Monday.
For complete coverage, see Wednesday’s issue of WWD.