Stage Stores Reports Comparable Sales for Holiday Period and Announces Multi-Year Plan to Accelerate Off-Price Growth
On a shifted basis, which compares the nine-week period ended January 5, 2019 compared to the nine-week period ended January 6, 2018, Gordmans off-price stores comparable sales increased 2.4%, department stores comparable sales decreased 0.4%, and total company comparable sales increased 0.1%.
Stage Stores, Inc. (NYSE:SSI) today reported comparable sales for the
holiday period. On a shifted basis, which compares the nine-week period
ended January 5, 2019 compared to the nine-week period ended January 6,
2018, Gordmans off-price stores comparable sales increased 2.4%,
department stores comparable sales decreased 0.4%, and total company
comparable sales increased 0.1%. E-commerce continued its trend of
double digit sales growth.
The company also announced its strategy to convert approximately 220
additional department stores to Gordmans off-price stores by the middle
of 2020. With the acceleration of the conversion of department stores to
the off-price model, the company will suspend its quarterly dividend and
expects to spend approximately $35 million in capital in 2019.
Michael Glazer, President and Chief Executive Officer, commented, “The
results of department stores converted to off-price continue to exceed
our expectations, with smaller stores more than doubling their volume
after conversion. Off-price stores, when compared to our department
stores, also benefit from a higher penetration of outperforming
non-apparel categories. As a result, off-price comp sales once again
increased during the holiday period, despite the headwind created by the
November 2017 marketing relaunch. In department stores, while apparel
sales continue to be challenged, we delivered strong results in
non-apparel, with home and gifts increasing more than 20% and
representing more than 10% of sales. Additionally, we expect to end the
year with more than $100 million of excess availability under our credit
facility.
“Turning to 2019 and beyond, I am thrilled to announce our multi-year
off-price conversion plan. By the end of 2020, we expect to have nearly
300 Gordmans stores, representing almost 50% of total sales volume. We
plan to convert approximately 70 stores in 2019, predominantly in the
smaller, mid-western markets where we have seen outstanding results to
date. We are looking forward to announcing our full year 2019 guidance,
including the impact our multi-year conversion strategy, in March, in
conjunction with our fourth quarter earnings release.”
The comparable sales calculation for the holiday period and going
forward includes converted stores. For 2018 this encompasses one store
converted in the first quarter, four stores converted in the third
quarter, and four stores converted in the fourth quarter. In addition, a
non-cash impairment charge related to the $14.9 million intangible asset
associated with the Peebles trade name may be incurred in the fourth
quarter 2018 due to the multi-year conversion plan. Though there are
several weeks left in the quarter, fourth quarter EBITDA is expected to
be approximately $30 million. This excludes the potential non-cash
impairment charge related to the Peebles trade name.
About Stage Stores
Stage Stores, Inc. is a leading retailer of trend-right, name-brand
values for apparel, accessories, cosmetics, footwear and home goods. As
of January 14, 2019, the Company operates in 42 states through 752
BEALLS, GOODY'S, PALAIS ROYAL, PEEBLES, and STAGE specialty department
stores and 68 GORDMANS off-price stores, as well as an e-commerce
website at www.stage.com.
For more information about Stage Stores, visit the Company’s website at corporate.stage.com.
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