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Saks warns about 2Q
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August 9, 2001: 7:27 a.m. ET
Luxury retailer expects wider loss as it reports lower sales in July
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NEW YORK (CNNfn) - Upscale retailer Saks Inc. reported a 6 percent sales decline in stores open at least a year Thursday and warned it would likely post a much wider-than-expected second-quarter loss.
Birmingham, Ala.-based Saks (SKS: Research, Estimates) said it now anticipates a second-quarter loss of between 28 cents and 32 cents a share instead of the 14 cents a share loss forecast by analysts, according to earnings tracker First Call.
Additionally, the company reported that same-store sales slid 4 percent in July. Total company sales fell 6 percent to $370.5 million in July, from $394.1 million a year earlier.
Saks, which operates the luxury chain Saks Fifth Avenue as well as department stores such as Proffitt's and Carson Pirie Scott in the Southeast and Midwest, blamed weak demand for the decline in both sales and results as the lagging economy has prompted consumers to spend less on luxury items and shift to more bargain-priced retailers.
CEO Brad Martin said the company was unable to achieve its gross margin targets as it has been forced to offer steep markdowns to drive sales. That has meant good bargains for shoppers, but less profit for the company.
"Our outlook for the second half of the year remains cautious, and we will continue to take proactive, necessary actions in order to maximize our financial results in this difficult retail environment," Martin said.
Saks shares ended down 11 cents at $10.49 Wednesday. 
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