Saks outlook improves
Robertson Stephens raises 2002 estimates on upscale retailer.
February 22, 2002: 12:30 p.m. ET
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NEW YORK (CNN/Money) - Robertson Stephens raised its 2002 earnings estimate for Saks Inc. Friday to 15 cents a share from 7 cents, a day after the upscale department store operator forecast that earnings will exceed Wall Street's consensus estimate if a robust economic rebound occurs.
The brokerage said, however, it is maintaining its "market perform" rating on Saks (SKS: up $0.76 to $10.48, Research, Estimates) as it believes consumers are still less willing to shop for luxury goods due to the recession, among other factors.
Shares of Saks, which have ranged between $4.60 and $13.95 in the last 52 weeks, jumped 7.5 percent Friday following the upgrade and the increased guidance.
Analysts polled by research firm First Call expect Saks to post 2002 earnings of 7 cents to 60 cents a share, with a consensus estimate of 37 cents.
On Thursday, the chain said it sees fourth-quarter and full-year 2001 profits toward the high end of Wall Street estimates thanks to a sharper focus on expense control, better customer service and marketing. The Birmingham, Ala.-based company also said it sees 2002 earnings per share exceeding the current Wall Street consensus view if the U.S. economy stages a more "robust recovery." First Call's consensus estimate is 48 cents per share.
Traditional department stores have struggled in the last year as consumers, jittery about the sliding economy and job cuts, have turned cautious, shifting more of their spending to discount chains such as Wal-Mart and Target.
The luxury market also has struggled, analysts have said, including Saks, whose high-end Saks Fifth Ave. stores have a strong presence in New York City, hit hard by the Sept. 11 terrorist attack on the World Trade Center.
Saks Chief Financial Officer Douglas Coltharp told CNN/Money.com on Feb. 8 that the company paid down $500 million in debt over the last year and said it refinanced its long-term revolving credit facility for $700 million over the next five years, leaving the company "sitting on a substantial amount of cash." 
from staff and wire reports
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