Whether you’re bullish or bearish on retailers, the recent sentiment and sales data has the industry under the microscope. Saks, Inc (SKS) was beaten up along with others a few months ago, but this luxury retailer is worth another look here.
Company Description
Saks is a well known retailer, offering luxury apparel, jewelry, cosmetics, and gifts under the Saks Fifth Avenue brand. The company has 46 stores and also has 57 off-price locations under the OFF 5TH name.
Comps Up 9.3%
On Oct 6 Saks announced a 9.3% increase in September same-store sales, pushing the company’s top line to $275 million for the 5-week month.
We saw a few analysts raise their quarterly and annual forecasts on the news. The Zacks Consensus Estimate for this year is up 4 cents, to $0.39. Next year’s average projection is up a penny to $0.50.
Last year the popular retailer mad $0.19 per share, putting forecasted growth rates at 103% and 29%, respectively. Those upward estimates revisions and the latest earnings surprise have SKS as a Zacks #1 Rank (Strong Buy). Saks has topped forecasts in each of the past 10 quarters.
Shares of SKS are going for a Saks-Fifth-Ave type price on the surface, north of 21 times next year’s estimates. But the growth rates put the PEG at 1.1 times, more in the OFF 5TH price range.
The price to sales is only 0.5 and the price to book is at 1.4, both showing a solid value as well.
The Chart
SKS has recently broken through a resistance level, clearing the way to return to the 52-week highs. The company’s Nov 15 earnings release could help propel shares even further.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
