Stage Stores Inc. (NYSE:SSI) Q2 2019 Earnings Conference Call - Final Transcript

Aug 22, 2019 • 08:30 am ET


Stage Stores Inc. (NYSE:SSI) Q2 2019 Earnings Conference Call - Final Transcript


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Good day ladies and gentlemen and welcome to the Stage Stores Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode.

[Operator Instructions]

I'd now like to introduce your host for today's conference, Ms. Alysha Tawney, Senior Manager, Strategy and Investor Relations. Ms. Tawney, you may begin.

Alysha Tawney

Thank you operator. Good morning. With us on the call is Michael Glazer, President and Chief Executive Officer and Jason Curtis, Chief Financial Officer. Supplemental materials regarding our business are available in our presentation posted in the Investor Relations section of our website at Management will not be speaking to directed slides. These slides are meant to facilitate your view of the Company's results and should be used as a post call reference.

Our comments this morning include adjusted EBITDA results, which are not derived in accordance with GAAP. Reconciliations of GAAP results to non-GAAP results, are included in this morning's earnings release, which is available in the Investor Relations section of our website. Our remarks this morning will also include forward-looking statements. Although management believes that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct.

Various factors may cause our actual results to differ materially from those projected in the forward-looking statements. For more information, please refer to the risk factors discussed in our most recent Form 10-K, our other filings with the SEC and this morning's earnings release. Forward-looking statements speak only as of today's date and we undertake no obligation to update those statements because of new information, future developments or otherwise.

I'll now turn the call over to Michael.

Michael Glazer

Thanks Alysha. Good morning everyone. Thank you for joining us for our second quarter earnings call. I'll start by our second quarter results then Jason will follow with the financial details.

Our strategic pivot to off-price began in 2017 with the Gordmans acquisition. It came further into focus with the conversion of nine department stores to off-price in 2018 and accelerated in 2019 with 89 additional off-price conversions. This multi-year effort reached an important inflection point in the second quarter.

The conversion stores contributed a 150 basis points to second quarter comparable sales and that is even with 35 of them, each being closed about 10 days during the quarter.

Overall, our comp sales increase was 1.8% for the second quarter. Notably, our comp sales were flat or positive each month with comp increases in both transaction count and average transaction value. As expected, our home business continued to deliver outstanding results in the second quarter. The catalysts for the home growth has been the investment that we've made in the high-capacity fixturing, and an expanded selection, which allowed us to bring the Gordmans home assortment and pricing into all our department stores.

Our Gordmans guests love our home product, in particular home decor, which we merchandise by various seasonal and lifestyle themes. Replicating the Gordmans home offering in department stores