Saks Jumps After Chain’s Quarterly Sales Exceed EstimatesCotten Timberlake
Saks Inc. surged today after posting revenue that exceeded analysts’ estimates and later on a report that the luxury retail chain hired Goldman Sachs Group Inc. to help it explore alternatives including a possible sale.
Saks jumped as much as 21 percent to $16.58 at 4:18 p.m. in New York, after the New York Post reported the hiring of Goldman, citing an unidentified person with knowledge of the situation. The shares had closed at $13.67, an 11 percent increase and the biggest one-day gain since Aug. 31, 2010.
Possible bidders for Saks include private-equity firms such as KKR & Co. and Leonard Green & Partners LP, the Post said.
Julia Bentley, a Saks spokeswoman, didn’t immediately return a phone call seeking comment.
Luxury shoppers’ concerns about higher taxes and the fiscal budget appeared to have abated, Chief Executive Officer Stephen Sadove said on a conference call today. Sales were strong in women’s apparel, shoes and handbags, the retailer said in a statement today. Still, the luxury market is not as robust as the stock market’s advances would suggest, he said.
Revenue advanced 5.2 percent to $793.2 million, Saks said in a statement today. Analysts projected $778.1 million, the average of 11 estimates. Sales at stores open at least a year climbed 5.9 percent, the company said. Saks generated sales by increasing the discount on its friends and family promotional event to 25 percent from 20 percent, Sadove said on the call.
Saks forecast that sales at stores open at least a year would advance 4 percent to 6 percent for the rest of the year.
Net income in the quarter ended May 4 fell 38 percent to $20 million, or 13 cents a share, from $32.1 million, or 28 cents, a year earlier, Saks said. Saks spent more integrating its store and online inventories into a so-called omni-channel.
Excluding some items, profit totaled 19 cents. Analysts projected 18 cents, the average of 13 estimates compiled by Bloomberg.