Saks Eats Their Dust

 | Feb 26, 2013 | 4:00 PM EST
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Saks (SKS) and Macy's (M) reported earnings Tuesday morning, and the results couldn't be more different. Saks reported a same-store sales climb of just 0.7% for its fiscal fourth quarter, while Macy's continues its winning ways with a comps gain of 3.9%. In the last five years, Macy's shares have significantly outperformed Saks and the S&P 500.

In terms of earnings, as well, Macy's beat the Street consensus estimate by $0.07 with a $2.05 profit per share. Revenue totaled $9.35 billion, up 7.2% year over year. For fiscal 2014, management now sees earnings per share of between $3.90 and $3.95 -- up from a previous estimate of $3.81. Same-store sales are pegged to rise 3.5%.

It was a different story over at Saks. Although EPS beat by $0.01 for the quarter, those above-mentioned same-store sales were disappointing indeed. The company blamed Hurricane Sandy, which devastated the New York City area and which Saks said wrecked its momentum. The company reported fiscal fourth-quarter earnings of $0.17 on a 5.6% revenue gain to $976.6 million. For the all of fiscal 2014, Saks expects sales to grow in the 3%-to-5% range.

While I'm sure Saks will get back on track as the chain recovers from the effects of the Hurricane, I can't help wonder why the shares have performed so poorly over the last five years. You'd think catering to the wealthy would be a license to print money. Meanwhile, Nordstrom (JWN) is outperforming the entire group, and Macy's is not too far behind. Saks and the S&P 500 are left in the dust.

Of the three, Nordstrom is the only department store that can print double-digit growth. The company's momentum mostly comes from its Rack concept and its e-commerce site Haut Look. Macy's growth is coming from store-level execution -- and, all the while, Saks seems to take one step forward and one back. Of the three, my favorite continues to be Nordstrom's, followed by Macy's.

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