Stage Stores reports a loss, but hopeful signs emerge
Houston-based Stage Stores again saw its profit slide in the second quarter, but it made headway in expanding its new off-price business and boosting store traffic at the start of the back-to-school season.
The specialty department store retailer on Thursday reported a $6.3 million loss. By comparison, the company eked out a profit of $40,000 during the same quarter last year.
Same-store sales fell 3.6 percent, an improvement relative to the 9.8 percent decline during the same period last year. Total sales also improved, jumping 11.4 percent to $377.1 million.
In a conference call with analysts, president and CEO Michael Glazer struck an optimistic tone, noting that same-store sales had increased significantly despite the overall drop. In recent quarters, the company has posted declines between 8 percent and 10 percent.
He added that foot traffic rose across the chain in July at the start of the backto-school season despite competition from other retailers and Amazon Prime Day, the e-commerce giant’s major sale period for members of its free shipping program.
“July was very competitive with what went on in the industry,” he said.
Stage Stores operates more than 800 locations, including Palais Royal, Bealls, Goody’s, Peebles
and Stage, in 42 states.
In the energy-centric states of Texas, Oklahoma, Louisiana and New Mexico, which account for about 40 percent of the company’s portfolio, sales at last began to climb. Those stores outperformed some others across the chain for the first time in months, boosted in part by an uptick in oil prices, the strength of the Mexican peso and store closures by other retailers.
“The four energy states posted sales results similar to the balance of the chain,” Glazer said. “That’s something we haven’t seen for the past couple of years.”
The company expects modest improvements during the remainder of the year as it works to grow its online business and integrates the 58 Gordmans stores it acquired earlier this year. The Nebraska-based discount department store retailer filed for Chapter 11 bankruptcy protection in March, and Stage Stores paid $75.6 million to take over about half the chain.
Since then, Stage Stores has been working to overhaul Gordmans operations to resemble the off-price model popularized by retailers including T.J. Maxx and Marshalls, which drive traffic with the promise of everyday discounts and a sort of “treasure hunt” for limited inventory. The off-price sector has continued to expand in recent years amid hundreds of department store closures.
“We want to thrill every guest with a fun shopping experience and exciting deals,” Glazer said. “We’ve totally changed the concept of Gordmans.”