Stage Stores, Inc. (NYSE: SSI) today reported financial results for the third quarter ended October 31, 2015. Sales and comparable sales each decreased 3.5%. On an adjusted basis, the Company reported a net loss of $9.4 million, or $0.29 per diluted share compared to an adjusted net loss of $0.16 per diluted share in the prior year.
'Our third quarter results were negatively impacted by stores located in geographies which were pressured by oil and gas and a devalued peso. Stores outside of those areas achieved a flat comp for the quarter,' said Michael Glazer, President and Chief Executive Officer. 'Based on these results and our expectation that these challenges will continue in the near term, we are guiding our comp sales to a range of -2% to -4% for the fourth quarter and adjusted earnings per diluted share to $0.70 to $0.80 for the fiscal year. We will manage our business with discipline around inventory control, implement additional cost reductions and maintain our focus on improving store productivity and driving online sales. Overall, we continue to believe that our strategic initiatives around e-commerce, an increased emphasis on merchandise style and value, a rationalized store base, store remodels, and rejuvenated marketing programs will better position us for sustainable long-term growth.'
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Third Quarter Reported Results
Sales decreased 3.5% to $351.6 million for the third quarter, as compared to $364.2 million in the prior year period. Comparable sales decreased 3.5%. Net loss was $10.2 million, or $0.32 per diluted share, versus $0.16 per diluted share for the prior year.
On an adjusted basis, net loss was $9.4 million, or $0.29 per diluted share, for the third quarter. Adjusted third quarter results exclude charges associated with the consolidation of the Company's headquarters and asset disposals associated with our store remodel program of approximately $1.5 million, or $0.03 per diluted share.
Share Repurchase Program
The Company also announced today that its Board of Directors approved the resumption of the $200 million share repurchase program authorized in 2011. The Company has $99.9 million remaining under the program.
Mr. Glazer commented, 'The Board's decision reflects confidence in the Company's future growth and cash flow generation. At current levels, we believe the share price does not reflect Stage's intrinsic value, making this an opportune time to resume our share repurchases.'
Under the program, the Company has the discretion to repurchase its common shares in the open market and/or in privately negotiated transactions. The extent to which the Company repurchases its common shares under the program, and the timing of such repurchases, will depend on market conditions, regulatory considerations and other factors. Purchases under the program will be financed by existing cash, cash flow or other liquidity sources. The program is eligible to begin on November 20, 2015 with no expiration date and may be suspended or discontinued at any time. Any common shares acquired will be available to meet obligations under equity compensation plans and for general corporate purposes.
Conference Call / Webcast Information
The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its third quarter results. Interested parties may participate in the Company's conference call by dialing 844-368-2238. Alternatively, interested parties may listen to a live webcast of the conference call through the Investor Relations section of the Company's website (www.stagestoresinc.com) under the 'Webcasts' caption. A replay of the conference call will be available online until midnight on Friday, December 4, 2015.
About Stage Stores
Stage Stores, Inc. operates 847 specialty department stores in 40 states and a direct-to-consumer channel under the BEALLS, GOODY'S, PALAIS ROYAL, PEEBLES and STAGE nameplates. The Company's stores, predominantly located in small towns and communities, and direct-to-consumer business offer a moderately priced, broad selection of trend-right, brand name apparel, accessories, cosmetics, footwear and home goods for the entire family. The Company's direct-to-consumer channel includes its e-commerce website and Send program. Its e-commerce website features assortments of merchandise similar to that found in its stores, as well as products available exclusively online. The Send program allows customers in the stores to have merchandise shipped directly to their homes if the merchandise is not available in the local store. For more information about Stage Stores, visit the Company's website at www.stagestoresinc.com.
Use of Adjusted (Non-GAAP) Financial Measures
The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures help to facilitate comparisons of Company operating performance across periods. This release includes non-GAAP financial measures identified as 'adjusted' results. A reconciliation of all non-GAAP financial measures to the most comparable GAAP financial measures is provided in a table included with this release.
Caution Concerning Forward-Looking Statements
Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words 'anticipate,' 'estimate,' 'expect,' 'objective,' 'goal,' 'project,' 'intend,' 'plan,' 'believe,' 'will,' 'should,' 'may,' 'target,' 'forecast,' 'guidance,' 'outlook' and similar expressions generally identify forward-looking statements. Similarly, descriptions of the Company's objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy. Forward-looking statements are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Forward-looking statements are based upon management's then-current views and assumptions regarding future events and operating performance. Although management believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of its knowledge, forward-looking statements involve risks, uncertainties and other factors which may materially affect the Company's business, financial condition, results of operations or liquidity.
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