8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

November 17, 2016

(Date of Report, Date of Earliest Event Reported)

Stage Stores, Inc.

(Exact Name of Registrant as Specified in Charter)

1-14035

(Commission File Number)

NEVADA (State or Other Jurisdiction of Incorporation)	91-1826900 (I.R.S. Employer Identification No.)
2425 West Loop South, Houston, Texas (Address of Principal Executive Offices)	77027 (Zip Code)

(800) 579-2302

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition

On November 17, 2016, Stage Stores, Inc. (“we,” “our” or “registrant”) issued a news release reporting our unaudited financial results for the third quarter of fiscal 2016 and updating our guidance for fiscal 2016.

The news release included “non-GAAP financial measures,” as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). Specifically, the following non-GAAP financial measures were included: (i) adjusted net loss; (ii) adjusted loss per diluted share; and (iii) adjusted selling, general and administrative expenses. The non-GAAP financial measures exclude from the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) after-tax charges related to the consolidation our corporate headquarters, severance associated with workforce reductions and strategic store closures of approximately $0.2 million, or $0.01 per diluted share for the third quarter of fiscal 2016, and $1.3 million, or $0.05 per diluted share for the year-to-date. The news release posted in the Investor Relations section of our website contains a presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and a reconciliation of the difference between the non-GAAP financial measures and the most directly comparable financial measures calculated and presented in accordance with GAAP. We believe this supplemental financial information enhances an investor’s understanding of our financial performance as it excludes those items which impact comparability of operating trends.  The non-GAAP financial information should not be considered in isolation or viewed as a substitute for net income, cash flow from operations or other measures of performance as defined by GAAP.  Moreover, non-GAAP financial information as reported by us is not necessarily comparable to other similarly titled measures of other companies due to the potential inconsistencies in the method of presentation and items considered.

Attached as Exhibit 99 to this Form 8-K is a copy of the news release, including information concerning forward-looking statements and factors that may affect our future results. The information in Exhibit 99 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such filing. By furnishing the information in this Form 8-K and the attached exhibit, we are making no admission as to the materiality of any information in this Form 8-K or the exhibit.

Item 8.01    Other Events.

In our news release issued on November 17, 2016, we also announced that our Board of Directors declared a quarterly cash dividend of $0.15 per share on our common stock, payable on December 14, 2016 to shareholders of record at the close of business on November 29, 2016.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

99 Stage Stores, Inc. news release dated November 17, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	STAGE STORES, INC.
Date: November 17, 2016	/s/ Oded Shein
	Oded Shein
	Executive Vice President,
	Chief Financial Officer and Treasurer

EX-99

Exhibit 99

NEWS RELEASE

CONTACT:

Randi Sonenshein

Senior Vice President, Finance and Strategy

713-331-4967

(rsonenshein@stagestores.com)

Stage Stores Reports Third Quarter Results and

Declares Quarterly Cash Dividend

HOUSTON, TX, November 17, 2016 - Stage Stores, Inc. (NYSE: SSI) today reported financial results for the third quarter ended October 29, 2016 and lowered guidance for the fiscal year.

The Company also announced that its Board of Directors declared a quarterly cash dividend of 15 cents per share on the Company’s common stock, payable on December 14, 2016 to shareholders of record at the close of business on November 29, 2016.

“Our third quarter results remained challenged by a difficult retail environment, unseasonably warm weather, the weak peso, and ongoing pressure in Texas, Oklahoma, Louisiana, and New Mexico from depressed oil prices,” said Michael Glazer, President and Chief Executive Officer. “As a result, we increased clearance sales to position inventory levels for the important fourth quarter. We have enhanced our assortments, heightened our promotions, and created a more engaging customer experience online and in stores to drive sales during the holiday season. We are pleased to announce our quarterly dividend and we remain committed to generating positive cash flow and delivering value to our shareholders.”

Third Quarter Results

For the third quarter, comparable sales decreased 8.2%. Total sales decreased 9.8% to $317.1 million, as compared to $351.6 million in the third quarter of the prior year. The Company’s third quarter net loss was $15.6 million, or $0.58 per diluted share, versus a $0.32 loss per diluted share during the same period in the prior year.

On an adjusted basis, the Company incurred a third quarter net loss of $15.5 million, or $0.57 per diluted share, versus a $0.29 loss per diluted share during the same period in the prior year. Adjusted results exclude charges related to the consolidation of the Company’s corporate headquarters, severance associated with workforce reductions, and strategic store closures, which adjustments totaled approximately $0.2 million after tax, or $0.01 per diluted share, in the third quarter of 2016.

Guidance

The Company anticipates fourth quarter comparable sales to be in the range of -2% to -6% and earnings per diluted share to be between $0.65 and $0.90. Weighted average diluted shares for the fourth quarter are expected to be 28.3 million.

The Company lowered its guidance for the fiscal year with comparable sales expected to be in the range of -7% to -8% and adjusted loss per share to be between $0.15 and $0.40. Weighted average shares for the year are expected to be 27.1 million.

Capital expenditures in 2016, net of construction allowances from landlords, are expected to be approximately $65 million, compared to $87 million in 2015.

Conference Call / Webcast Information

The Company will hold a conference call today at 8:30 a.m. Eastern Time to discuss its third quarter results. Interested parties may participate in the Company’s conference call by dialing 844-368-2238. Alternatively, interested parties may listen to a live webcast of the conference call through the Investor Relations section of the Company’s website (www.stagestoresinc.com) under the “Webcasts” caption. A replay of the conference call will be available online until midnight on Friday, December 2, 2016.

About Stage Stores

Stage Stores operates 820 specialty department stores in 38 states and a direct-to-consumer channel under the BEALLS, GOODY'S, PALAIS ROYAL, PEEBLES and STAGE nameplates. The Company’s stores, predominantly located in small towns and communities, and direct-to-consumer business offer a moderately priced, broad selection of trend-right, brand name apparel, accessories, cosmetics, footwear and home goods for the entire family. The Company’s direct-to-consumer channel includes its e-commerce website and Send program. Its e-commerce website features assortments of merchandise similar to that found in its stores, as well as products available exclusively online. The Send program allows customers in the stores to have merchandise shipped directly to their homes if the merchandise is not available in the local store. For more information about Stage Stores, visit the Company’s website at www.stagestoresinc.com.

Use of Adjusted (Non-GAAP) Financial Measures

The Company reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures help to facilitate comparisons of Company operating performance across periods. This release includes non-GAAP financial measures identified as “adjusted” results. A reconciliation of all non-GAAP financial measures to the most comparable GAAP financial measures is provided in a table included with this release.

Caution Concerning Forward-Looking Statements

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words “anticipate,” “estimate,” “expect,” “objective,” “goal,” “project,” “intend,” “plan,” “believe,” “will,” “should,” “may,” “target,” “forecast,” “guidance,” “outlook” and similar expressions generally identify forward-looking statements. Similarly, descriptions of the Company’s objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy. Forward-looking statements are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Forward-looking statements are based upon management’s then-current views and assumptions regarding future events and operating performance. Although management believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of its knowledge, forward-looking statements involve risks, uncertainties and other factors which may materially affect the Company’s business, financial condition, results of operations or liquidity.

Forward-looking statements are not guarantees of future performance and actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, economic conditions, cost and availability of goods, inability to successfully execute strategic initiatives, competitive pressures, economic pressures on the Company and its customers, freight costs, the risks discussed in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”), and other factors discussed from time to time in the Company’s other SEC filings. This release should be read in conjunction with such filings, and you should consider all of such risks, uncertainties and other factors carefully in evaluating forward-looking statements.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures the Company makes on related subjects in its public announcements and SEC filings.

(Tables to follow)

Stage Stores, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

	Three Months Ended
	October 29, 2016					October 31, 2015
	Amount			% to Sales (a)		Amount			% to Sales (a)
Net sales	$	317,140		100.0	%	$	351,575		100.0	%
Cost of sales and related buying, occupancy and distribution expenses	260,550			82.2	%	275,479			78.4	%
Gross profit	56,590			17.8	%	76,096			21.6	%
Selling, general and administrative expenses	84,564			26.7	%	92,096			26.2	%
Interest expense	1,395			0.4	%	743			0.2	%
Loss before income tax	(29,369		)	(9.3	)%	(16,743		)	(4.8	)%
Income tax benefit	(13,735		)	(4.3	)%	(6,560		)	(1.9	)%
Net loss	$	(15,634	)	(4.9	)%	$	(10,183	)	(2.9	)%
Basic loss per share data:
Basic loss per share	$	(0.58	)			$	(0.32	)
Basic weighted average shares outstanding	27,155					32,017
Diluted loss per share data:
Diluted loss per share	$	(0.58	)			$	(0.32	)
Diluted weighted average shares outstanding	27,155					32,017
(a) Percentages may not foot due to rounding.

Stage Stores, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

	Nine Months Ended
	October 29, 2016					October 31, 2015
	Amount			% to Sales (a)		Amount			% to Sales (a)
Net sales	$	988,275		100.0	%	$	1,101,804		100.0	%
Cost of sales and related buying, occupancy and distribution expenses	779,128			78.8	%	846,324			76.8	%
Gross profit	209,147			21.2	%	255,480			23.2	%
Selling, general and administrative expenses	260,076			26.3	%	281,783			25.6	%
Interest expense	3,616			0.4	%	1,995			0.2	%
Loss before income tax	(54,545		)	(5.5	)%	(28,298		)	(2.6	)%
Income tax benefit	(23,492		)	(2.4	)%	(11,093		)	(1.0	)%
Net loss	$	(31,053	)	(3.1	)%	$	(17,205	)	(1.6	)%
Basic loss per share data:
Basic loss per share	$	(1.15	)			$	(0.54	)
Basic weighted average shares outstanding	27,066					31,917
Diluted loss per share data:
Diluted loss per share	$	(1.15	)			$	(0.54	)
Diluted weighted average shares outstanding	27,066					31,917
(a)Percentages may not foot due to rounding.

Stage Stores, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

(Unaudited)

	October 29, 2016			January 30, 2016
ASSETS
Cash and cash equivalents	$	18,902		$	16,487
Merchandise inventories, net	569,343			435,996
Prepaid expenses and other current assets	60,283			48,279
Total current assets	648,528			500,762
Property, equipment and leasehold improvements, net	315,865			311,717
Intangible assets	15,235			15,235
Other non-current assets, net	22,711			20,385
Total assets	$	1,002,339		$	848,099
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	210,995		$	84,019
Accrued expenses and other current liabilities	64,126			71,863
Total current liabilities	275,121			155,882
Long-term debt obligations	236,592			162,876
Other long-term liabilities	100,549			99,588
Total liabilities	612,262			418,346
Commitments and contingencies
Common stock, par value $0.01, 100,000 shares authorized, 32,331 and 32,030 shares issued, respectively	323			320
Additional paid-in capital	409,690			406,034
Treasury stock, at cost, 5,175 shares, respectively	(43,301		)	(43,068		)
Accumulated other comprehensive loss	(5,936		)	(6,353		)
Retained earnings	29,301			72,820
Total stockholders' equity	390,077			429,753
Total liabilities and stockholders' equity	$	1,002,339		$	848,099

Stage Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended
	October 29, 2016			October 31, 2015
Cash flows from operating activities:
Net loss	$	(31,053	)	$	(17,205	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, amortization and impairment of long-lived assets	54,285			58,326
Loss on retirements of property, equipment and leasehold improvements	273			712
Deferred income taxes	1,965			(557		)
Tax (deficiency) benefit from stock-based compensation	(3,295		)	540
Stock-based compensation expense	7,345			8,926
Amortization of debt issuance costs	164			164
Excess tax benefits from stock-based compensation	—			(945		)
Deferred compensation obligation	233			163
Amortization of employee benefit related costs	673			581
Construction allowances from landlords	6,994			2,127
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(133,347		)	(175,806		)
Increase in other assets	(18,527		)	(3,335		)
Increase in accounts payable and other liabilities	119,544			95,476
Net cash provided by (used in) operating activities	5,254			(30,833		)
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(67,934		)	(69,156		)
Proceeds from disposal of assets	1,177			37
Net cash used in investing activities	(66,757		)	(69,119		)
Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	389,701			428,783
Payments of revolving credit facility borrowings	(314,783		)	(304,960		)
Proceeds from long-term debt obligation	5,830			—
Payments of long-term debt obligations	(3,507		)	(1,466		)
Payments for stock related compensation	(857		)	(3,708		)
Proceeds from issuance of stock awards	—			543
Excess tax benefits from stock-based compensation	—			945
Cash dividends paid	(12,466		)	(13,916		)
Net cash provided by financing activities	63,918			106,221
Net increase in cash and cash equivalents	2,415			6,269
Cash and cash equivalents:
Beginning of period	16,487			17,165
End of period	$	18,902		$	23,434

Stage Stores, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands, except earnings per share)

(Unaudited)

	Three Months Ended						Nine Months Ended
	October 29, 2016			October 31, 2015			October 29, 2016			October 31, 2015
Net loss (GAAP)	$	(15,634	)	$	(10,183	)	$	(31,053	)	$	(17,205	)
Consolidation of corporate headquarters (pretax)	—			1,313			110			1,941
Severance charges associated with workforce reduction (pretax)	—			—			794			—
Strategic store closures and other initiatives (pretax)	443			183			1,394			8,834
Income tax impact	(271		)	(692		)	(989		)	(4,224		)
Adjusted net loss (non-GAAP)	$	(15,462	)	$	(9,379	)	$	(29,744	)	$	(10,654	)
Diluted loss per share (GAAP)	$	(0.58	)	$	(0.32	)	$	(1.15	)	$	(0.54	)
Consolidation of corporate headquarters (pretax)	—			0.04			—			0.06
Severance charges associated with workforce reduction (pretax)	—			—			0.03			—
Strategic store closures and other initiatives (pretax)	0.02			0.01			0.05			0.28
Income tax impact	(0.01		)	(0.02		)	(0.03		)	(0.13		)
Adjusted diluted loss per share (non-GAAP)	$	(0.57	)	$	(0.29	)	$	(1.10	)	$	(0.33	)

	Three Months Ended
	October 29, 2016					October 31, 2015
	Amount			% to Sales (a)		Amount			% to Sales (a)
Selling, general and administrative expenses (GAAP)	$	84,564		26.7	%	$	92,096		26.2	%
Consolidation of corporate headquarters	—			—	%	(1,313		)	(0.4	)%
Strategic store closures	(443		)	(0.1	)%	(183		)	(0.1	)%
Adjusted selling, general and administrative expenses (non-GAAP)	$	84,121		26.5	%	$	90,600		25.8	%
(a)Percentages may not foot due to rounding.

	2016 Guidance Range
	Low			High
Diluted loss per share (GAAP)	$	(0.45	)	$	(0.20	)
Consolidation of corporate headquarters, severance charges associated with workforce reduction and strategic store closures	0.05			0.05
Adjusted diluted loss per share (non-GAAP)	$	(0.40	)	$	(0.15	)