Higher Costs Cut Into $SKS Profits

“Saks Inc.’s SKS +0.91% fiscal fourth-quarter earnings fell 45% due to higher expenses, even as revenue increased.

The luxury retailer previously warned it expected flat same-store sales and gross margin for the period, saying sales trends were soft for the first two weeks of November in the aftermath of superstorm Sandy.

Sandy affected about 55% of its total company store revenue base. Due to the storm and its severe flooding and power outages, 11 of the 45 Saks Fifth Avenue stores were closed from one to seven days, including the New York flagship, which was closed for two days.

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“As expected, the New York City flagship store sales lagged the company-wide performance for the quarter, due in part to the impact of Hurricane Sandy,” Chief Executive Stephen I. Sadove said.

Mr. Sadove said he expects the external environment to remain somewhat volatile. “There are several macro factors, such as higher tax rates on the more affluent and the unknown resolution of pending fiscal matters that could create additional uncertainty, particularly in the first half of the year,” he said….”

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