Shares of Saks Inc. surged Tuesday as the luxury retail chain reported strong results for the latest quarter and as the New York Post reported that the company hired Goldman Sachs Group Inc. to help it explore alternatives including a possible sale.
The shares climbed 11 percent during the regular session to close at $13.67. Shortly after 5 p.m. in New York, the shares were up an additional 18 percent at $16.15, after the Post reported the hiring of Goldman, citing an unidentified person with knowledge of the situation.
Through the close of regular trading Tuesday, the shares of New York-based Saks had increased 30 percent this year, compared with a 17 percent gain for the Standard & Poor's 500 Index.
Possible bidders for Saks include private-equity firms such as KKR & Co. and Leonard Green & Partners LP, the Post said.
Julia Bentley, a Saks spokeswoman, didn't immediately return a phone call seeking comment.
Luxury shoppers' concerns about higher taxes and the fiscal budget appeared to have abated, Chief Executive Officer Stephen Sadove said on a conference call earlier in the day. Sales were strong in women’s apparel, shoes and handbags, the retailer said in a statement. Still, the luxury market is not as robust as the stock market’s advances would suggest, he said.
Revenue advanced 5.2 percent to $793.2 million, Saks said in the statement. Analysts projected $778.1 million, the average of 11 estimates. Sales at stores open at least a year climbed 5.9 percent, the company said. Saks generated sales by increasing the discount on its friends and family promotional event to 25 percent from 20 percent, Sadove said on the call.
Saks forecast that sales at stores open at least a year would advance 4 percent to 6 percent for the rest of the year.
Net income in the quarter ended May 4 fell 38 percent to $20 million, or 13 cents a share, from $32.1 million, or 28 cents, a year earlier, Saks said. Saks spent more integrating its store and online inventories into a so-called omni-channel.
Excluding some items, profit totaled 19 cents. Analysts projected 18 cents, the average of 13 estimates compiled by Bloomberg.
© Copyright 2013 Bloomberg News. All rights reserved.