Shares of the luxury department store chain Saks Incorporated declined more than 10 per cent in pre-market trading this morning, after the company reported disappointing revenue figures for the first three months of the year.Saks said it generated sales of $753.6 million as comparable store sales increased 4.8 per cent. Analysts polled by Bloomberg had expected the company to report top line results of $759 million.
Earnings at the New York, NY, based firm were in line with forecasts, at $0.18 per share, or $32.1 million.
“Year-over-year first quarter sales growth was solid but not as robust as in prior quarters,” Saks Chief Executive Stephen Sadove said. “While we continue to see overall growth in the business, certain areas experienced a deceleration in sales.”
Sadove attributed the weakness to women’s ready to wear and designer apparel, with shoes powering results.
Gross margins at the chain improved 30 basis points to 44.4 per cent, but Saks does not expect to maintain those results. The company estimates margins to recede as much as 125 basis points in the second quarter.
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