Stage Stores increased its comparable store sales in the second quarter, as the company continued to see progress in its transition from department stores to the off-price channel.
Net sales in the second quarter ended August 3 were $368 million compared to $369 million in the second quarter of 2018. Comparable sales increased 1.8% for total company, with off-price conversions benefiting comparable sales by 150 basis points. Net loss was $23.9 million compared to a net loss of $16.9 million in the previous second quarter. Loss per share was $0.83 compared to loss per share of $0.60.
“Second quarter results reflect a significant milestone in the implementation of our 2019 and long-term strategies,” said Michael Glazer, CEO, Stage Stores. “Our second quarter comparable sales increase reflects a 150 basis point benefit from off-price conversions as well as stabilization of our women’s apparel business. We were excited to see that total comparable sales growth was driven by increases in both average transaction value and number of transactions. Additionally, our liquidity improved more than $10 million from the end of the first quarter, and we continue to expect positive cash flow for the full year. We are pleased with the continued momentum in August following the 500 basis point improvement in comparable store sales in the second quarter from the first quarter. In fact, comparable sales are up mid-single digits for the first two weeks of the third quarter, which further validates our pivot from department stores to off-price.”
Looking ahead, Glazer added, “We now expect adjusted EBITDA of $20 million to $25 million compared to the $10 million to $15 million range that we previously expected. This is based on our accelerated conversion schedule and significant SG&A benefits now expected to be realized in the fall of 2019 rather than in 2020, as originally anticipated. Our current guidance also reflects revised comparable sales outlook of plus 1% to plus 3%, based on our spring season performance. With positive comparable sales, improved liquidity, increased earnings expectations and the recently announced acceleration of our off-price conversion strategy, we believe that the future is bright for Stage Stores and we look forward to executing in the third quarter, the holiday season, and beyond.”