UPDATE 2-Saks sees sales rising, speeds up e-commerce launch
By Phil Wahba
May 21 (Reuters) - Saks Inc reported higher-than-expected first-quarter sales on Tuesday and said it would speed up the launch of an e-commerce site for its outlet chain as it tries to catch rivals.
Its shares rose 6.8 percent to $13.12 in early trading, the highest level since before the 2008 financial crisis that decimated luxury sales in the United States.
Saks said sales at stores open at least a year increased 5.9 percent in the quarter that ended May 4, well above the 2.6 percent increase Wall Street was expecting, according to Thomson Reuters I/B/E/S, and better than Nordstrom and Bloomingdale's, a unit of Macy's Inc.
Expectations had been low given that Saks offered steeper discounts in the quarter than a year earlier, and after the soft results of its rivals. Lazard Capital Markets analyst Jennifer Davis called Saks' results "better than feared."
Sales at its famed Fifth Avenue flagship in New York, which generates one-fifth of sales, rose at a more modest pace, the company said.
Saks is in the midst of a multi-year, $95 million effort to upgrade its computer systems to improve online sales. Nordstrom and Macy's Inc have spent hundreds of millions of dollars integrating their e-commerce and physical stores and are now able to use their stores to fulfill online orders, a boon for both.
Saks already offers online shopping for its full-service department store chain, but said on Tuesday it was moving up the launch of an e-commerce site for its Saks Off Fifth chain to autumn 2013 from a launch planned for 2014. That will cost Saks up to $6 million more the previously forecast.
Nordstrom and Neiman Marcus have long offered e-commerce for their respective outlet chains of lower-priced merchandise.
Overall sales at Saks were $793.2 million, above the $776.8 million Wall Street had forecast.
The luxury chain said same-store sales for the balance of the year should be up 4 percent to 6 percent.
Saks reported a profit of $20 million, or 13 cents per share, for the quarter that ended May 4, versus a year-earlier profit of $32.1 million, or 18 cents per share. Excluding one-time items, Saks had a profit of 19 cents per share, in line with Wall Street estimates.
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