NEW YORK (AP) — Saks Inc. says its fiscal fourth-quarter net income climbed 48 percent, buoyed by strong sales of handbags, fine jewelry and men's and women's clothing.
The earnings topped expectations. Saks' stock price surged in premarket trading.
The New York department store operator, which caters to affluent shoppers, bounced back from the recession much quicker than other retailers because the wealthy returned to spending faster than middle- to low-income shoppers have.
But Saks' Chairman and CEO Stephen Sadove said in a statement that Saks must still work hard to keep pace with its shoppers' needs.
"Our customers are more discerning and demanding than ever before, and our future depends on our ability to successfully and quickly evolve with the customer," he said.
For the period ended Jan. 28, Saks earned $37 million, or 21 cents per share. That compares with earnings of $25 million, or 14 cents per share, last year.
Removing store closing costs, impairment charges and other items, earnings were 17 cents per share. That tops the 14 cents-per-share forecast of analysts surveyed by FactSet.
Saks' stock added 58 cents, or 5.3 percent, to $11.45 in Tuesday premarket trading.
The company said that its gross profit margin fell to 37.6 percent from 37.8 percent.
Quarterly revenue for the period increased 7 percent to $925.1 million from $866.3 million, beating Wall Street's $918.9 million estimate.
Revenue at stores open at least a year rose 7.7 percent. Saks Direct, which sells online, posted an increase of about 21 percent. Saks said revenue at Off 5th stores open at least a year was weaker than expected.
This metric is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Full-year net income surged 57 percent to $74.8 million, or 45 cents per share, from $47.8 million, or 30 cents per share, the year before.
Adjusted earnings were 44 cents per share.
Gross margin rate rose to 40.8 percent from 40.1 percent on a better luxury environment, more items selling at full price and fewer promotions.
Annual revenue climbed 8 percent to $3.01 billion. Revenue at stores open at least a year increased 9.5 percent.
For fiscal 2012, Saks expects revenue at stores open at least a year to rise 5 percent to 7 percent. It also expects profit margins to get slightly larger, mostly in the second half of the year.
Saks currently runs 46 Saks Fifth Avenue stores and 60 Off 5th stores.
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