Thinking Saks Fifth Ave

Saks stock seen hitting $25 - Barron's
NEW YORK, March 18 (Reuters) - Saks Inc. (SKS.N: Quote, Profile , Research) shares could hit the mid-$20 range as it improves its operating results, according to a Barron's report.

The company, whose New York Fifth Avenue flagship accounts for some 20 percent of sales, has vowed to boost operating margins from its current estimated 2 percent from a management, merchandise and operations make-over plan.

Saks has sold off mid-tier operations acquired during a time when it looked to boost the number of department stores in its portfolio.

High-end retailer rival Nordstrom (JWN.N: Quote, Profile , Research), by comparison, achieved operating margins of about 12.2 percent in the last quarter.

Saks operating margins are expected to reach 4 percent by the end of the current fiscal year, according to the March 19 Barron's report.

"A share price in the mid-20s could be easy to achieve as Saks retools its stores and image to yield a more stylish bottom line," Barron's said.
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>> always a good sign when some pub comes out when you're thinking about the name. My wife is very into fashion and shops like a killer tornado so I trust her views on these things and she's been telling me the buying has gotten a lot better at Saks and the mailer they sent around recently was top notch. as well.

If $25 is just by boosting margins to 4%, imagine where this stock is a couple years from now with operating margins perhaps 7% which is doable.
Not a bad pickup here. SKS.

 

Check MOV also - similar space (high-end retail), but a forward PE (fy '08) of only 16 and a PEG of 1.27.

 

Wouldn't you know MOV is my one retail stock now.

 

i was there 2 weeks ago and the store was almost empty + most of the merchandise saksed

 

Saks Renovation

Finally, don't miss Phil Wahba's great Fortune piece on the $250 million renovation of Saks Fifth Avenue's Manhattan flagship. As he writes: "The buzz of activity comes at a time when Saks has some wind in its sails again after faring a rough patch three years ago. Sales were declining quarter after quarter…Now, Saks has reported seven quarters of comparable sales gains in the last eight, including a 7.3% jump in the third quarter." Fortune