The current year first quarter net income included a net gain of $1.4 million (net of taxes), or $.01 per share, primarily related to the disposition of closed stores. The quarter also included approximately $2.2 million (net of taxes), or $.02 per share, of expenses associated with the investigation of improperly collected markdown allowances.
In the prior year, the Company recorded net income of $20.2 million, or $.14 per share, for the first quarter ended May 1, 2004. The prior year quarter included charges of $2.6 million (net of taxes), or $.02 per share, related to property impairments.
First Quarter Comments Consolidated first quarter results reflected a 1.9 percent comparable store sales increase, a 10 basis point decline in gross margin rate, and a modest amount of continued investment spending at SFAE.
SDSG operating income fell 30 percent to $20.1 million for the quarter. The decrease from the prior year was principally due to lower gross margin dollars associated with the 0.9 percent comparable store sales decline and increased SG&A expenses which included the previously noted legal reserve. SDSG's year-over-year gross margin rate improved slightly.
SFAE operating income declined 10 percent for the period to $40.8 million. While SFAE's comparable store sales grew 5.5 percent, the gross margin rate fell slightly and SG&A expenses increased as previously noted.
The Company ended the quarter with approximately $290 million of cash on hand and no borrowings on its $800 million revolving credit facility. Total debt at April 30, 2005 was approximately $1.35 billion, and debt-to-capitalization was 38.9 percent.
US leading online retailer Saks Incorporated began with just five Proffitt's stores in metropolitan Knoxville, Tennessee. From 1994 to 1998, company added McRae's, Younkers, Parisian, Herberger's, Carson Pirie Scott, Boston Store, and Bergner's chains, as well as 32 additional stores from Lovemans, Hess, Parks-Belk, and Brody's, which were converted into existing store nameplates.
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