10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 28, 2017

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 1-14035

Stage Stores, Inc.

(Exact name of registrant as specified in its charter)

NEVADA  (State or other jurisdiction of incorporation or organization)	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)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	o	Accelerated filer	þ
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of November 29, 2017, there were 27,627,382 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS
PART I  FINANCIAL INFORMATION
			Page No.
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets
		October 28, 2017 and January 28, 2017	3
		Condensed Consolidated Statements of Operations and Comprehensive Loss
		Three and Nine Months Ended October 28, 2017 and October 29, 2016	4
	Condensed Consolidated Statements of Cash Flows
		Nine Months Ended October 28, 2017 and October 29, 2016	5
	Condensed Consolidated Statement of Stockholders' Equity
		Nine Months Ended October 28, 2017	6
		Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		27
Item 4.	Controls and Procedures		27
PART II  OTHER INFORMATION
Item 1.	Legal Proceedings		28
Item 1A.	Risk Factors		28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3.	Defaults Upon Senior Securities		30
Item 4.	Mine Safety Disclosures		30
Item 5.	Other Information		30
Item 6.	Exhibits		31
SIGNATURES			32

PART I – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

Stage Stores, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

(Unaudited)

	October 28, 2017			January 28, 2017
ASSETS
Cash and cash equivalents	$	30,330		$	13,803
Merchandise inventories, net	578,633			409,384
Prepaid expenses and other current assets	52,376			41,574
Total current assets	661,339			464,761
Property, equipment and leasehold improvements, net of accumulated depreciation of $734,626 and $697,087, respectively	260,870			284,110
Intangible assets	17,135			15,235
Other non-current assets, net	28,237			22,883
Total assets	$	967,581		$	786,989
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	214,783		$	101,985
Accrued expenses and other current liabilities	77,093			66,685
Total current liabilities	291,876			168,670
Long-term debt obligations	268,969			163,749
Other long-term liabilities	70,052			74,410
Total liabilities	630,897			406,829
Commitments and contingencies
Common stock, par value $0.01, 100,000 shares authorized, 32,794 and 32,340 shares issued, respectively	328			323
Additional paid-in capital	416,422			410,504
Treasury stock, at cost, 5,175 shares, respectively	(43,248		)	(43,286		)
Accumulated other comprehensive loss	(5,021		)	(5,648		)
(Accumulated deficit) retained earnings	(31,797		)	18,267
Total stockholders' equity	336,684			380,160
Total liabilities and stockholders' equity	$	967,581		$	786,989

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Stage Stores, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Net sales	$	357,236		$	317,140		$	1,042,924		$	988,275
Cost of sales and related buying, occupancy and distribution expenses	285,542			260,550			816,071			779,128
Gross profit	71,694			56,590			226,853			209,147
Selling, general and administrative expenses	100,036			84,564			289,188			260,076
Interest expense	2,001			1,395			5,505			3,616
Loss before income tax	(30,343		)	(29,369		)	(67,840		)	(54,545		)
Income tax benefit	(12,621		)	(13,735		)	(24,873		)	(23,492		)
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Other comprehensive income:
Amortization of employee benefit related costs, net of tax of $81, $86, $242 and $256, respectively	$	132		$	139		$	395		$	417
Pension settlement charge, net of tax of $142	232			—			232			—
Total other comprehensive income	364			139			627			417
Comprehensive loss	$	(17,358	)	$	(15,495	)	$	(42,340	)	$	(30,636	)
Basic loss per share data:
Basic loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Diluted loss per share data:
Diluted loss earnings per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)
Diluted weighted average shares outstanding	27,602			27,155			27,468			27,066

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Stage Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended
	October 28, 2017			October 29, 2016
Cash flows from operating activities:
Net loss	$	(42,967	)	$	(31,053	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation, amortization and impairment of long-lived assets	49,476			54,285
(Gain) loss on retirements of property, equipment and leasehold improvements	(926		)	273
Deferred income taxes	(6,065		)	1,965
Tax deficiency from stock-based compensation	—			(3,295		)
Stock-based compensation expense	6,191			7,345
Amortization of debt issuance costs	216			164
Deferred compensation obligation	(38		)	233
Amortization of employee benefit related costs and pension settlement charge	1,011			673
Construction allowances from landlords	1,228			6,994
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(137,479		)	(133,347		)
Increase in other assets	(9,709		)	(18,527		)
Increase in accounts payable and other liabilities	120,137			119,544
Net cash (used in) provided by operating activities	(18,925		)	5,254
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(25,342		)	(67,934		)
Proceeds from insurance and disposal of assets	2,404			1,177
Business acquisition	(36,144		)	—
Net cash used in investing activities	(59,082		)	(66,757		)
Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	426,308			389,701
Payments of revolving credit facility borrowings	(318,851		)	(314,783		)
Proceeds from long-term debt obligation	—			5,830
Payments of long-term debt obligations	(5,626		)	(3,507		)
Payments of debt issuance costs	(8		)	—
Payments for stock related compensation	(192		)	(857		)
Cash dividends paid	(7,097		)	(12,466		)
Net cash provided by financing activities	94,534			63,918
Net increase in cash and cash equivalents	16,527			2,415
Cash and cash equivalents:
Beginning of period	13,803			16,487
End of period	$	30,330		$	18,902
Supplemental disclosures including non-cash investing and financing activities:
Interest paid	$	5,221		$	3,425
Income taxes (refunded) paid	$	(8,485	)	$	2,931
Unpaid liabilities for capital expenditures	$	5,362		$	4,631

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Stage Stores, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

For the Nine Months EndedOctober 28, 2017

(in thousands, except per share data)

(Unaudited)

	Common Stock			Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Loss			Retained Earnings (Accumulated Deficit)
	Shares	Amount					Shares		Amount									Total
Balance at January 28, 2017	32,340	$	323	$	410,504		(5,175	)	$	(43,286	)	$	(5,648	)	$	18,267		$	380,160
Net loss	—	—		—			—		—			—			(42,967		)	(42,967		)
Other comprehensive income	—	—		—			—		—			627			—			627
Dividends on common stock, $0.25 per share	—	—		—			—		—			—			(7,097		)	(7,097		)
Deferred compensation	—	—		(38		)	—		38			—			—			—
Issuance of equity awards, net	454	5		(5		)	—		—			—			—			—
Tax withholdings paid for net settlement of stock awards	—	—		(230		)	—		—			—			—			(230		)
Stock-based compensation expense	—	—		6,191			—		—			—			—			6,191
Balance at October 28, 2017	32,794	$	328	$	416,422		(5,175	)	$	(43,248	)	$	(5,021	)	$	(31,797	)	$	336,684

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Stage Stores, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Stage Stores, Inc. and its subsidiary (“we,” “us” or “our”) have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. Those adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the interim periods have been made. Results of operations for such interim periods are not necessarily indicative of the results of operations for a full year due to seasonality and other factors. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto filed with our Annual Report on Form 10-K for the year ended January 28, 2017 (“Form 10-K”).    

References to a particular year are to our fiscal year, which is the 52- or 53-week period ending on the Saturday closest to January 31st of the following calendar year.  For example, a reference to “2017” is a reference to the fiscal year ending February 3, 2018, and “2016” is a reference to the fiscal year ended January 28, 2017. Fiscal years 2017 and 2016 are comprised of 53 weeks and 52 weeks, respectively. References to the “three months endedOctober 28, 2017” and “three months endedOctober 29, 2016” are for the respective 13-week fiscal quarters. References to the “nine months endedOctober 28, 2017” and “nine months endedOctober 29, 2016” are for the respective 39-week fiscal periods.

On April 7, 2017, we acquired select assets of Gordmans Stores, Inc. and its subsidiaries through a bankruptcy auction (“Gordmans Acquisition”). The results of the Gordmans branded stores that we operated from April 7, 2017 through October 28, 2017 are included in our condensed consolidated statement of operations for the nine months endedOctober 28, 2017 (see Note 8).     

 Recently Adopted Accounting Pronouncements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which modifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and the option to estimate expected forfeitures or recognize forfeitures as they occur. We adopted this standard on a prospective basis in first quarter of 2017. Under the new standard, excess income tax benefits and deficiencies related to awards that vest or settle are recognized in the provision for income taxes as a discrete event in the period in which they occur, which may create significant volatility in the provision for income taxes and earnings. Historically, these amounts were reflected within additional paid-in capital on the balance sheet. In addition, upon adoption excess tax benefits are reflected within operating activities in the statements of cash flows, whereas historically these amounts were reflected as a financing activity. Cash paid to tax authorities on an employee’s behalf for withheld shares continues to be classified as a financing activity in the statement of cash flows. We made a policy election to recognize forfeitures as they occur. For the three and nine months endedOctober 28, 2017, we recognized excess tax deficiencies of $0.1 million and $2.1 million, respectively, in the provision for income taxes. The adoption of the other requirements of this guidance did not have a material impact on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on certain specific cash flow issues including proceeds received from the settlement of insurance claims. This guidance requires cash proceeds received from the settlement of insurance claims to be classified on the statement of cash flows on the basis of the related insurance coverage (that is, the nature of the loss). The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted and is to be applied retrospectively. We adopted this guidance in the first quarter of 2017. The adoption of ASU 2016-15 did not have a material impact on our condensed consolidated statements of cash flows.

7

 Recent Accounting Pronouncements Not Yet Adopted. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most existing revenue recognition guidance in GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects to be entitled to in exchange for those goods or services. The guidance establishes a five-step revenue recognition model, which includes (i) identifying the contract with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The guidance also requires additional disclosures to describe the nature, timing and uncertainty of revenue and cash flows from contracts with customers. ASU 2014-09 may be applied retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized in retained earnings at the date of adoption. The new revenue standard will be effective for us in the first quarter of fiscal 2018, which begins on February 4, 2018, and we plan to apply the full retrospective method of adoption. We do not expect the adoption to have a material impact on our financial condition, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases(Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. The new standard requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. We plan to make a policy election that will keep leases with an initial term of 12 months or less off of the balance sheet and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Consistent with current GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financing or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. As a result, lessees will be required to put most leases on their balance sheets while recognizing expense on their income statements in a manner similar to current accounting. In addition, this guidance requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. The new standard will be effective for us in the first quarter of fiscal 2019, which begins on February 3, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We continue to evaluate the impact that the adoption of this ASU will have on our consolidated financial statements and disclosures, including the effect of certain optional practical expedients permitted under the transition guidance. Based on our assessment to date, we expect the adoption of ASU 2016-02 will result in a significant increase in lease-related assets and liabilities on our consolidated balance sheets. The ultimate impact of adopting the new standard will depend on our lease portfolio as of the adoption date.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. If a subtotal for operating income is shown on the income statement, then the other components of the net periodic benefit cost must be presented separately from the line item that includes the service cost and outside of any subtotal of operating income. The new standard also requires disclosure of the line item(s) in the income statement that include net periodic benefit costs. Additionally, only the service cost component of the net periodic benefit cost is eligible for capitalization. We plan to adopt ASU 2017-07 in the first quarter of fiscal 2018, which begins on February 4, 2018. The change in presentation of service cost must be applied retrospectively, while the capitalization of service cost must be applied on a prospective basis. The pension plan that we sponsor is frozen, and therefore, service costs no longer accrue under the plan. Upon adoption, we will recognize net periodic pension costs in selling, general and administrative expenses, consistent with our current presentation, and we will disclose this in the notes to the financial statements.

8

NOTE 2 - STOCK-BASED COMPENSATION

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Restricted stock units	$	108		$	—		$	310		$	—
Non-vested stock	1,300			1,362			4,203			5,311
Performance shares	579			(569		)	1,988			2,034
Total compensation expense	1,987			793			6,501			7,345
Related tax benefit	(747		)	(298		)	(2,444		)	(2,762		)
Stock-based compensation expense, net of tax	$	1,240		$	495		$	4,057		$	4,583

As of October 28, 2017, we have unrecognized compensation cost of $12.6 million related to stock-based compensation awards granted, which is expected to be recognized over a weighted average period of 2.1 years.

Stock Appreciation Rights (“SARs”)

Prior to 2012, we granted SARs to our employees, which generally vested 25% annually over a four-year period from the grant date. Outstanding SARs expire, if not exercised or forfeited, within seven years from the grant date. Exercised SARs are settled by the issuance of common stock in an amount equal to the increase in share price of our common stock between the grant date and the exercise date.

The following table summarizes SARs activity for the nine months endedOctober 28, 2017:

Stock Appreciation Rights	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, vested and exercisable at January 28, 2017	177,900		$	17.69
Expired	(65,000	)	16.29
Outstanding, vested and exercisable at October 28, 2017	112,900		$	18.50	0.4	$	—

9

Restricted Stock Units (“RSUs”)

We grant RSUs to our employees, which vest 25% annually over a four-year period from the grant date. Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date. Unvested RSUs have the right to receive a dividend equivalent payment equal to cash dividends paid on our common stock. RSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for RSUs is remeasured based on the closing share price of our common stock at each reporting period until the award vests. Compensation expense is recognized ratably over the vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes RSU activity for the nine months endedOctober 28, 2017:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at January 28, 2017	—		$	—
Granted	1,321,250		2.14
Forfeited	(37,500	)	2.09
Outstanding at October 28, 2017	1,283,750		2.14

Non-vested Stock

We grant shares of non-vested stock to our employees and non-employee directors. Non-vested stock awarded to employees vests 25% annually over a four-year period from the grant date. Non-vested stock awarded to non-employee directors cliff vests after one year. At the end of the vesting period, non-vested stock converts one-for-one to common stock. Certain non-vested stock awards have shareholder rights, including the right to vote and to receive dividends. The fair value of non-vested stock awards with dividend rights is based on the closing share price of our common stock on the grant date. The fair value of non-vested stock awards that do not have dividend rights is discounted for the present value of expected dividends during the vesting period. Compensation expense is recognized ratably over the vesting period.

The following table summarizes non-vested stock activity for the nine months endedOctober 28, 2017:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at January 28, 2017	1,596,410		$	10.22
Granted	668,371		2.21
Vested	(562,122	)	11.22
Forfeited	(47,130	)	9.39
Outstanding at October 28, 2017	1,655,529		6.67

The weighted-average grant date fair value for non-vested stock granted during the nine months endedOctober 28, 2017 and October 29, 2016 was $2.21 and $6.78, respectively. The aggregate intrinsic value of non-vested stock that vested during the nine months endedOctober 28, 2017 and October 29, 2016, was $1.2 million and $2.7 million, respectively. The payment of the employees’ tax liability for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liability. As a result, the actual number of shares issued during nine months endedOctober 28, 2017 was 453,677.

10

Performance Shares

We grant performance shares as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a three-year performance cycle. Performance shares cliff vest following a three-year performance cycle, and if earned are settled in shares of our common stock. The actual number of shares of our common stock that may be earned and issued ranges from zero to a maximum of twice the number of target shares outstanding on the vesting date. Grant recipients do not have any shareholder rights on unvested or unearned shares. The fair value of performance shares is estimated using a Monte Carlo simulation, based on the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recorded ratably over the corresponding vesting period.

The following table summarizes information about the performance shares that were outstanding at October 28, 2017:

Period Granted	Target Shares Outstanding at January 28, 2017	Target Shares Granted	Target Shares Vested	Target Shares Forfeited		Target Shares Outstanding at October 28, 2017	Weighted Average Grant Date Fair Value Per Share
2015	158,490	—	—	(4,444	)	154,046	$	28.33
2016	330,233	—	—	(8,527	)	321,706	8.69
2017	—	600,000	—	—		600,000	1.80
Total	488,723	600,000	—	(12,971	)	1,075,752	7.65

The weighted-average grant date fair value for performance shares granted during the nine months endedOctober 28, 2017 and October 29, 2016 was $1.80 and $8.69, respectively. No performance shares vested during the nine months endedOctober 28, 2017 and October 29, 2016, respectively.

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NOTE 3 - DEBT OBLIGATIONS

Debt obligations for each period presented consisted of the following (in thousands):

	October 28, 2017		January 28, 2017
Revolving Credit Facility	$	267,159	$	159,702
Finance obligations	1,849		2,708
Other financing	2,986		7,753
Total debt obligations	271,994		170,163
Less: Current portion of debt obligations	3,025		6,414
Long-term debt obligations	$	268,969	$	163,749

We have a $400.0 million senior secured revolving credit facility (“Revolving Credit Facility”) with a seasonal increase to $450.0 million and a $25.0 million letter of credit sublimit. The Revolving Credit Facility matures on December 16, 2021.

We use the Revolving Credit Facility to provide financing for working capital and general corporate purposes, as well as to finance capital expenditures and to support our letter of credit requirements. Borrowings are limited to the availability under a borrowing base that is determined principally on eligible inventory as defined by the Revolving Credit Facility agreement. Inventory, cash and cash equivalents are pledged as collateral. The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the Revolving Credit Facility agreement. For the nine months endedOctober 28, 2017, the weighted average interest rate on outstanding borrowings and the average daily borrowings were 2.62% and $221.7 million, respectively.

Letters of credit issued under the Revolving Credit Facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At October 28, 2017, outstanding letters of credit totaled approximately $7.3 million. These letters of credit expire within 12 months of issuance, but may be renewed. Excess availability under the Revolving Credit Facility at October 28, 2017 was $157.4 million.

The Revolving Credit Facility agreement contains covenants which, among other things, restrict, based on required levels of excess availability, (i) the amount of additional debt or capital lease obligations, (ii) the payment of dividends to $30 million in a fiscal year, and (iii) the repurchase of common stock under certain circumstances. The agreement also contains a fixed charge coverage ratio covenant in the event excess availability is below a defined threshold or an event of default has occurred. At October 28, 2017, we were in compliance with all of the debt covenants of the Revolving Credit Facility agreement and we expect to remain in compliance.

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NOTE 4 - EARNINGS PER SHARE

The following tables show the computation of basic and diluted loss per common share for each period presented (in thousands, except per share amounts):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Basic:
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Less: Allocation of earnings to participating securities	(66		)	—			(268		)	—
Net loss allocated to common shares	(17,788		)	(15,634		)	(43,235		)	(31,053		)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Basic loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)
	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Diluted:
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Less: Allocation of earnings to participating securities	(66		)	—			(268		)	—
Net loss allocated to common shares	(17,788		)	(15,634		)	(43,235		)	(31,053		)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Add: Dilutive effect of stock awards	—			—			—			—
Diluted weighted average shares outstanding	27,602			27,155			27,468			27,066
Diluted loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)

The number of shares attributable to SARs and non-vested stock grants that would have been considered dilutive securities, but were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	October 28, 2017	October 29, 2016	October 28, 2017	October 29, 2016
Number of anti-dilutive shares due to net loss for the period	—	20	—	42
Number of anti-dilutive SARs due to exercise price greater than average market price of our common stock	113	187	129	198

NOTE 5 - STOCKHOLDERS’ EQUITY

On November 16, 2017, our Board of Directors (“Board”) declared a quarterly cash dividend of $0.05 per share of common stock, payable on December 13, 2017 to shareholders of record at the close of business on November 28, 2017.

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NOTE 6 - PENSION PLAN

We sponsor a frozen defined benefit pension plan. The components of net periodic pension cost were as follows (in thousands):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Employer service cost	$	123		$	85		$	368		$	255
Interest cost on pension benefit obligation	363			400			1,090			1,198
Expected return on plan assets	(407		)	(437		)	(1,222		)	(1,312		)
Amortization of net loss	213			225			637			673
Pension settlement charge	374			—			374			—
Net periodic pension cost	$	666		$	273		$	1,247		$	814

During the three and nine months endedOctober 28, 2017, we recognized a non-cash pension settlement charge of $0.4 million as a result of lump sum distributions exceeding interest cost for 2017. This settlement was included in selling, general and administrative expenses in our condensed consolidated statements of operation.

Our funding policy is to make contributions to maintain the minimum funding requirements for our pension obligations in accordance with the Employee Retirement Income Security Act. We may elect to contribute additional amounts to maintain a level of funding to minimize the Pension Benefit Guaranty Corporation premium costs or to cover the short-term liquidity needs of the plan in order to maintain current invested positions. We contributed $0.7 million during the nine months endedOctober 28, 2017, and we expect to contribute an additional $0.2 million in 2017.

NOTE 7 - FAIR VALUE MEASUREMENTS

We recognize or disclose the fair value of our financial and non-financial assets and liabilities on a recurring and non-recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.

We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and base the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 –	Quoted prices in active markets for identical assets or liabilities.
Level 2 –	Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 –	Inputs that are both unobservable and significant to the overall fair value measurement reflect our estimates of assumptions that market participants would use in pricing the asset or liability.

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Financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

	October 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	18,750	$	18,750	$	—	$	—
	January 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	18,094	$	18,094	$	—	$	—

^(a) The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

^(b) Using the market approach, the fair values of these items represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the nine months endedOctober 28, 2017 and for the fiscal year ended January 28, 2017.

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Non-financial assets measured at fair value on a nonrecurring basis were as follows (in thousands):

	October 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	229	$	—	$	—	$	229
	January 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	8,795	$	—	$	—	$	8,795

^(a) Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that property, equipment and leasehold improvements may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its carrying value may not be recoverable, we use a discounted cash flow model, with a 10% discount rate, to estimate the fair value of the underlying long-lived assets. An impairment write-down is recorded if the carrying value of a long-lived asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the nine months endedOctober 28, 2017 and fiscal year 2016, we recognized impairment charges of $0.2 million and $19.9 million respectively. Impairment charges are recorded in cost of sales and related buying, occupancy and distribution expenses.

Due to the short-term nature of cash and cash equivalents, payables and short-term debt obligations, the carrying value approximates the fair value of these instruments. In addition, we believe that the Revolving Credit Facility obligation approximates its fair value because interest rates are adjusted daily based on current market rates.

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NOTE 8 - GORDMANS ACQUISITION

On April 7, 2017, we acquired select assets of Gordmans Stores, Inc. and its subsidiaries (collectively, the “Sellers”) through a bankruptcy auction. The terms of the transaction agreement required us to take assignment of a minimum of 50 of the Sellers’ store leases, with rights to take assignment of the leases for an additional seven stores and a distribution center. We also acquired all of the Sellers’ inventory, furniture, fixtures and equipment at the 57 store locations and distribution center, as well as the trademarks and other intellectual property of the Sellers. The Gordmans branded stores, which we intend to operate as an off-price concept, add scale to our business, while allowing us to leverage strategic synergies and our current infrastructure. The acquisition also brings beneficial geographic and customer diversification.

The purchase price for the inventory and other assets acquired from the Sellers was approximately $36.1 million, all of which was paid by the end of the second quarter 2017 using existing cash and availability under the Revolving Credit Facility. We took assignment of 55 of the 57 store locations and the distribution center. We also entered into new leases for three former Gordmans store locations, of which, two were opened in the second quarter 2017 and one opened in August 2017.

The estimated fair values of the assets acquired at the acquisition date were as follows (in thousands):

	April 7, 2017
Inventory	$	31,770
Property, plant and equipment and other assets	4,374
Total	$	36,144

Acquisition and integration related costs were recognized in selling, general and administrative expenses and were as follows for each period presented (in thousands):

	Three Months Ended			Nine Months Ended
	October 28, 2017
Business acquisition costs	$	(39	)	$	9,169

Net sales included in our condensed consolidated statements of operations from the GORDMANS branded stores that we operated beginning on April 7, 2017, were as follows for each period presented (in thousands):

	Three Months Ended		Nine Months Ended
	October 28, 2017
Net sales	$	61,774	$	133,591

Pro forma net sales and earnings for the three and nine months ended October 28, 2017 and October 29, 2016 are not presented due to the impracticability in substantiating this information as the Gordmans Acquisition was limited to select assets and assignment of leases acquired through a bankruptcy auction. Furthermore, the results of operations may have been impacted by the Sellers’ liquidation and may not be indicative of future performance.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Concerning Forward-Looking Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 (“Act”) provides a safe harbor for forward-looking statements to encourage companies to provide prospective information, so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statements. We wish to take advantage of the “safe harbor” provisions of the Act.

Certain statements in this report are forward-looking statements within the meaning of the Act, 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 our 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 and factors concerning future conditions that may ultimately prove to be inaccurate and could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements that are made herein and in other reports and releases are not guarantees of future performance and actual results may differ materially from those discussed in such forward-looking statements as a result of various factors. These factors include, but are not limited to, the ability for us to maintain normal trade terms with vendors, the ability for us to comply with the various covenant requirements contained in the Revolving Credit Facility agreement, the demand for apparel, and other factors. The demand for apparel and sales volume can be affected by significant changes in economic conditions, including an economic downturn, employment levels in our markets, consumer confidence, energy and gasoline prices, the value of the Mexican peso, and other factors influencing discretionary consumer spending. Other factors affecting the demand for apparel and sales volume include unusual weather patterns, an increase in the level of competition in our market areas, competitors’ marketing strategies, changes in fashion trends, changes in the average cost of merchandise purchased for resale, availability of product on normal payment terms and the failure to achieve the expected results of our merchandising and marketing plans as well as our store opening or relocation plans. Additional assumptions, factors and risks concerning future conditions are discussed in the Risk Factors section of the Form 10-K, and may be discussed from time to time in our other filings with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Most of these factors are difficult to predict accurately and are generally beyond our control.

Forward-looking statements are and will be based upon management’s then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. Although management believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of our knowledge, forward-looking statements, by their nature, involve risks, uncertainties and other factors, any one or a combination of which could materially affect our business, financial condition, results of operations or liquidity.

Readers should carefully review the Form 10-K in its entirety including, but not limited to, our financial statements and the notes thereto and the risks and uncertainties described in Part I, Item 1A (Risk Factors) of the Form 10-K. This report should be read in conjunction with the Form 10-K, and you should consider all of these risks, uncertainties and other factors carefully in evaluating forward-looking statements.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update forward-looking statements whether as a result of new information, future events or otherwise. Readers are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

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For purposes of the following discussion, all references to the “third quarter 2017” and the “third quarter 2016” are for the 13-week fiscal periods ended October 28, 2017 and October 29, 2016, respectively, and all references to “year-to-date 2017” and “year-to-date 2016” are for the 39-week fiscal periods ended October 28, 2017 and October 29, 2016, respectively.

The financial information, discussion and analysis that follow should be read in conjunction with our consolidated financial statements and the related notes included in this Form 10-Q as well as the financial and other information included in the Form 10-K.

Our Business

We are a leading retailer of trend-right, moderately priced, name-brand apparel, accessories, cosmetics, footwear and home goods. As of October 28, 2017, we operated in 42 states through 789 BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE specialty department stores and 58 GORDMANS off-price stores, as well as an e-commerce website. Our specialty department stores are predominantly located in small towns and rural communities. Our GORDMANS off-price stores are predominantly located in mid-sized, non-rural Midwest markets.

Results of Operations

Select financial results for the third quarter 2017 were as follows (comparisons are to the third quarter 2016):

• Net sales increased $40.1 million, or 12.6%, including $61.8 million in sales from the Gordmans off-price stores.

• Comparable sales decreased 3.9%.

• Gross profit increased $15.1 million, or 26.7%.

• Selling, general and administrative (“SG&A”) expenses increased $15.5 million, or 18.3%, primarily due to the addition of the Gordmans off-price stores.

• Diluted loss per common share was $0.64, compared to $0.58.

• Adjusted (non-GAAP) diluted loss per common share was $0.64, compared to adjusted (non-GAAP) diluted loss per common share of $0.57 (see the reconciliation of non-GAAP financial measures on page 21).

• Paid cash dividends of $1.4 million, or $0.05 per common share.

2017 Outlook and Strategy

Although in-store traffic continues to be negative and we experienced temporary disruption from hurricanes in the third quarter 2017, some macroeconomic challenges have moderated and we have undertaken steps that we expect to improve our business. Year-over-year store traffic has declined during each quarter of 2017, although the rate of decline has decreased in the last two quarters. We believe that the headwinds from the downturn in the oil and gas sector are no longer a factor in our comparable sales performance as we anniversary those results. Comparable sales for our stores in Texas, Louisiana, Oklahoma and New Mexico, which have been impacted by the oil and gas sector, slightly outperformed the balance of our chain during each quarter in the year-to-date 2017.

We are focused on effectively managing our inventory, promotional levels and expenses. For the third quarter 2017, compared to the third quarter 2016:

• Department store inventory was down 9% and clearance inventory was down 20% as of the quarter end.

• Gross profit as a percent of sales increased by 230 basis points.

• SG&A expenses as a percent of sales increased by 130 basis points due to the deleverage from lower department store sales.

Approximately 130 of our department stores were disrupted or closed during the third quarter 2017 due to Hurricanes Harvey and Irma. The majority of those stores were reopened within a week, however, nine of those stores suffered significant damage. Six of the nine stores reopened in time for Thanksgiving, one will reopen in the spring of 2018 and we have permanently closed two of the stores. We estimate that the hurricanes negatively impacted total sales by approximately $3.8 million, or 1.1% of sales, during the time the stores were closed. Excluding the impact of the hurricanes, our comparable sales improved from the second quarter to the third quarter 2017.

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During the third quarter 2017, we progressed with the transition of the Gordmans stores to an off-price concept by eliminating coupons and promotions and implementing a pricing strategy that is competitive with the off-price industry. In addition, we have increased the inventory in the Gordmans stores closer to planned levels as we head into the holiday season. Our first marketing campaign for Gordmans, featuring digital, radio and television advertisements, launched in mid-November and will continue through Christmas.

We closed nine department stores during the year-to-date 2017, and we expect to close approximately 20 department stores in total in 2017, as part of our multi-year plan to exit stores that do not meet our sales productivity and profitability benchmarks.

In September 2017, we announced the planned closure of our South Hill, Virginia distribution center by the end of 2017 as part of our strategy to increase the efficiency of our distribution network. Operations from the Virginia distribution center will be transferred to our distribution centers in Texas, Ohio and Nebraska.

During the year-to-date 2017, we made progress on our Jump Start Plan key strategic initiatives for our department stores, which are to:

•Continue building our e-commerce business with further enhancements to the site design and functionality, improved mobile capabilities, additional digital marketing, expanded assortments and investments in our supply chain. These efforts contributed to double-digit e-commerce growth in each quarter of 2017 compared to the prior year periods. In the third quarter 2017, we introduced online ordering from within our stores, giving guests access to an assortment that is approximately seven times larger than our average store.

•Invigorate merchandise with a more frequent flow of new items, an emphasis on style and value and an expanded gift selection. We aim to be the gift destination for our guests this holiday season by expanding our women’s gift power center and adding a toy power center featuring the iconic FAO Schwarz brand. By building more liquidity into our merchandise plans and editing less productive categories, we have been able to increase our emphasis on key categories that appeal to our guests, including beauty, plus sizes, gifts and women’s updated and contemporary apparel.

•Build on beauty with the addition of new, smaller Estee Lauder and Clinique counters in 32 stores and the launch of an expanded self-service beauty concept featuring new brands in 150 stores during the third quarter 2017. We have also expanded assortments within beauty, bath and body across the store base.

•Improve merchandise margin by increasing average unit retail price, eliminating overlapping coupons and enhancing seasonal transitions. In addition, we have begun adding off-price buys into our department stores.

•Improve our relationship with our customers by communicating through the channels she uses most often and engaging her through our loyalty programs. We continue to reduce the amount of print marketing and shift our media mix to digital as we place more emphasis on our mobile app, email and social media. We have also shifted the timing of marketing campaigns to align with the heavier shopping periods. In July, we relaunched the value proposition for our Style Circle Rewards^® loyalty program and private label credit card in conjunction with launching the gRewards^TM loyalty program. In November, we reissued over 2 million new private label credit cards for our department and off-price stores.

•Enhance the shopping experience for our guests by creating a culture of strong customer service and execution through our suggestive selling program, referred to as “Sell One More.” We have simplified administrative tasks to enable our store associates to direct their attention on providing exceptional service to our guests.

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Non-GAAP Financial Measures

To provide additional transparency, the following supplemental information reflects our results of operations for the periods presented on a basis in conformity with GAAP and on a non-GAAP basis to show earnings excluding certain items presented below. 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, diluted earnings per common share or other measures of performance as defined by GAAP.  Moreover, the inclusion of non-GAAP financial information as used herein 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. The following tables set forth the supplemental financial information and the reconciliation of GAAP disclosures to non-GAAP financial measures (in thousands, except diluted loss per share): 

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Net loss (GAAP)	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Business acquisition costs (pretax)(a)	(39		)	—			9,169			—
Store closures, impairments and other (pretax)(b)	552			443			1,333			1,394
Consolidation of corporate headquarters and severance charges associated with workforce reduction (pretax)(c)	—			—			—			904
Income tax impact(d)	(370		)	(271		)	(4,176		)	(989		)
Adjusted net loss (non-GAAP)	$	(17,579	)	$	(15,462	)	$	(36,641	)	$	(29,744	)
Diluted loss per share (GAAP)	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)
Business acquisition costs (pretax)(a)	—			—			0.33			—
Store closures, impairments and other (pretax)(b)	0.02			0.02			0.05			0.05
Consolidation of corporate headquarters and severance charges associated with workforce reduction (pretax)(c)	—			—			—			0.03
Income tax impact(d)	(0.02		)	(0.01		)	(0.15		)	(0.03		)
Adjusted diluted loss per share (non-GAAP)	$	(0.64	)	$	(0.57	)	$	(1.34	)	$	(1.10	)

^(a) Reflects acquisition and integration costs related to the Gordmans Acquisition.

^(b) Reflects store closing costs related to our strategic store closure plan that was announced in fiscal 2015, which primarily consists of fixture moving costs, lease termination charges, severance, and impairment charges. In addition, the three and nine months ended October 28, 2017 include a pension settlement charge, and the three and nine months ended October 29, 2016 include costs related to other strategic initiatives.

^(c) Reflects duplicate rent expense and moving related costs associated with the consolidation of our corporate headquarters into a single location, which was completed in February 2016, and severance charges associated with workforce reductions. 

^(d) Taxes were allocated based on the estimated annual effective tax rate, excluding the impact of the stock-based compensation tax deficiency discreet item.

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Third Quarter 2017 Compared to Third Quarter 2016

The following table sets forth the results of operations for the periods presented (in thousands, except percentages):

	Three Months Ended
	October 28, 2017					October 29, 2016					Change
	Amount			% to Sales (a)		Amount			% to Sales (a)		Amount			%
Net sales	$	357,236		100.0	%	$	317,140		100.0	%	$	40,096		12.6	%
Cost of sales and related buying, occupancy and distribution expenses	285,542			79.9	%	260,550			82.2	%	24,992			9.6	%
Gross profit	71,694			20.1	%	56,590			17.8	%	15,104			26.7	%
Selling, general and administrative expenses	100,036			28.0	%	84,564			26.7	%	15,472			18.3	%
Interest expense	2,001			0.6	%	1,395			0.4	%	606			43.4	%
Loss before income tax	(30,343		)	(8.5	)%	(29,369		)	(9.3	)%	(974		)	3.3	%
Income tax benefit	(12,621		)	(3.5	)%	(13,735		)	(4.3	)%	1,114			(8.1	)%
Net loss	$	(17,722	)	(5.0	)%	$	(15,634	)	(4.9	)%	$	(2,088	)	13.4	%
(a)Percentages may not foot due to rounding.

Net Sales

Sales increased $40.1 million, or 12.6%, to $357.2 million for the third quarter 2017 from $317.1 million for the third quarter 2016, primarily due to $61.8 million in sales from the Gordmans branded stores, partially offset by a decline in comparable sales and closed stores. Comparable sales include store sales after a store has been in operation for 14 full months and e-commerce sales. Comparable sales decreased 3.9% in the third quarter 2017 compared to the third quarter 2016, reflecting a 7.3% decrease in the number of transactions, partially offset by a 3.7% increase in average transaction value. The increase in average transaction value was comprised of a 5.2% increase in average unit retail, partially offset by a 1.4% decrease in units per transaction.

Our non-apparel categories outperformed our comparable sales average and our apparel categories underperformed. Home, gifts, cosmetics, handbags and footwear were our best performing merchandise categories. Our best performing apparel areas were denim, plus sizes, dresses and activewear.

Gross Profit

Gross profit increased $15.1 million, or 26.7%, to $71.7 million for the third quarter 2017 from $56.6 million for the third quarter 2016. Gross profit as a percent of sales increased 230 basis points to 20.1% for the third quarter 2017 from 17.8% for the third quarter 2016. The increase in the gross profit rate reflects a decrease of 260 basis points in the merchandise costs of sales rate due to fewer markdowns and less clearance sales attributable to effective inventory management, partially offset by an increase of 30 basis points in the buying, occupancy and distribution expenses rate.

Selling, General and Administrative Expenses

SG&A expenses for the third quarter 2017 increased $15.5 million to $100.0 million from $84.6 million for the third quarter 2016. As a percent of sales, SG&A expenses increased to 28.0% for the third quarter 2017 from 26.7% for the third quarter 2016. The increase in SG&A expenses is primarily attributable to higher store expenses from the addition of the Gordmans branded stores.

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Interest Expense

Net interest expense was $2.0 million for the third quarter 2017, compared to $1.4 million for the third quarter 2016. Interest expense is primarily comprised of interest on borrowings under the Revolving Credit Facility, related letters of credit and commitment fees, amortization of debt issuance costs and interest on finance obligations. The increase in interest expense is primarily due to an increase in average borrowings and higher interest rates under the Revolving Credit Facility for the third quarter 2017 compared to the third quarter 2016.

Income Taxes

Our effective income tax rate for the third quarter 2017 was 41.6%, resulting in an estimated tax benefit of $12.6 million. This compares to an effective tax rate of 46.8% and an income tax benefit of $13.7 million for the third quarter 2016. The effective income tax rates were impacted by a $0.1 million tax deficiency charge related to share-based compensation in the third quarter 2017, and the settlement of an Internal Revenue Service (“IRS”) appeal in the third quarter 2016, which resulted in a $0.7 million tax benefit.

Year-to-Date 2017 Compared to Year-to-Date 2016

The following table sets forth the results of operations for the periods presented (in thousands, except percentages):

	Nine Months Ended
	October 28, 2017					October 29, 2016					Change
	Amount			% to Sales (a)		Amount			% to Sales (a)		Amount			%
Net sales	$	1,042,924		100.0	%	$	988,275		100.0	%	$	54,649		5.5	%
Cost of sales and related buying, occupancy and distribution expenses	816,071			78.2	%	779,128			78.8	%	36,943			4.7	%
Gross profit	226,853			21.8	%	209,147			21.2	%	17,706			8.5	%
Selling, general and administrative expenses	289,188			27.7	%	260,076			26.3	%	29,112			11.2	%
Interest expense	5,505			0.5	%	3,616			0.4	%	1,889			52.2	%
Loss before income tax	(67,840		)	(6.5	)%	(54,545		)	(5.5	)%	(13,295		)	24.4	%
Income tax benefit	(24,873		)	(2.4	)%	(23,492		)	(2.4	)%	(1,381		)	5.9	%
Net loss	$	(42,967	)	(4.1	)%	$	(31,053	)	(3.1	)%	$	(11,914	)	38.4	%
(a) Percentages may not foot due to rounding.

Net Sales

Sales increased $54.6 million, or 5.5%, to $1,042.9 million for the year-to-date 2017 from $988.3 million for the year-to-date 2016, primarily due to $133.6 million in sales from the Gordmans branded stores, partially offset by a decline in comparable sales and closed stores. Comparable sales decreased 5.7% for the year-to-date 2017 compared to the year-to-date 2016, reflecting a decrease of 8.3% in the number of transactions, partially offset by an increase of 2.8% in average transaction value. The increase in average transaction value was comprised of a 2.3% increase in average unit retail and a 0.5% increase in units per transaction.

Our non-apparel categories outperformed our comparable sales average and our apparel categories underperformed. Home, gifts, cosmetics, handbags and footwear were our best performing merchandise categories. Our best performing apparel areas were denim, plus sizes, dresses and activewear.

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Gross Profit

Gross profit increased $17.7 million, or 8.5%, to $226.9 million for the year-to-date 2017 from $209.1 million for the year-to-date 2016. Gross profit as a percent of sales increased 60 basis points to 21.8% for the year-to-date 2017 from 21.2% for the year-to-date 2016. The increase in the gross profit rate reflects a decrease of 130 basis points in the merchandise cost of sales rate due to fewer markdowns and less clearance sales attributable to effective inventory management, partially offset by an increase of 70 basis points in the buying, occupancy and distribution expenses rate.

Selling, General and Administrative Expenses

SG&A expenses for the year-to-date 2017 increased $29.1 million to $289.2 million from $260.1 million for the year-to-date 2016. As a percent of sales, SG&A expenses increased to 27.7% for the year-to-date 2017 from 26.3% for the year-to-date 2016. The increase in SG&A expenses is primarily attributable to higher store expenses from the addition of the Gordmans branded stores, partially offset by a reduction in advertising expense. SG&A expenses for the year-to-date 2017 also included Gordmans Acquisition related costs of $9.2 million, or 0.9% of sales.

Interest Expense

Net interest expense was $5.5 million for the year-to-date 2017, compared to $3.6 million for the year-to-date 2016. Interest expense is primarily comprised of interest on borrowings under the Revolving Credit Facility, related letters of credit and commitment fees, amortization of debt issuance costs and interest on finance obligations. The increase in interest expense is primarily due to an increase in average borrowings and higher interest rates under the Revolving Credit Facility for the year-to-date 2017 as compared to the year-to-date 2016.

Income Taxes

Our effective income tax rate for the year-to-date 2017 was 36.7%, resulting in an estimated tax benefit of $24.9 million. This compares to an effective tax rate of 43.1% and an income tax benefit of $23.5 million for the year-to-date 2016.

The effective income tax rates were impacted by a $2.1 million tax deficiency charge related to share-based compensation in the year-to-date 2017, and the settlement of an IRS appeal in the year-to-date 2016, which resulted in a $0.7 million tax benefit.

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Seasonality and Inflation

Our business, like many other retailers, is subject to seasonal influences, with a significant portion of sales and income typically realized during the last quarter of our fiscal year. Working capital requirements fluctuate during the year and generally reach their highest levels during the third and fourth quarters. Because of the seasonality of our business, results from any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

We do not believe that inflation has had a material effect on our results of operations. However, there can be no assurance that our business will not be affected by inflation in the future.

Liquidity and Capital Resources

Our liquidity is currently provided by (i) existing cash balances, (ii) operating cash flows, (iii) normal trade credit terms from our vendors and their factors and (iv) the Revolving Credit Facility. Our primary cash requirements are for operational needs, including rent and salaries, inventory purchases, and capital investments in our stores, e-commerce and information technology. We also have used our cash flows and other liquidity sources to pay quarterly cash dividends. Our cash requirements for 2017 include the Gordmans Acquisition and additional investments required to support the integration of the Gordmans operations into our infrastructure.

We believe that our sources of liquidity will be sufficient to cover working capital needs, planned capital expenditures and debt service requirements for the remainder of 2017 and the foreseeable future. 

Key components of our cash flow are summarized below (in thousands):

	Nine Months Ended
	October 28, 2017			October 29, 2016
Net cash (used in) provided by:
Operating activities	$	(18,925	)	$	5,254
Investing activities	(59,082		)	(66,757		)
Financing activities	94,534			63,918

Operating Activities

During the year-to-date 2017, we used $18.9 million in cash from operating activities. Net loss, adjusted for non-cash expenses, generated cash of approximately $6.9 million. Changes in operating assets and liabilities used net cash of approximately $27.1 million, which included increases of $137.5 million in merchandise inventories, primarily due to the seasonal build of inventories, and $9.7 million in other assets, partially offset by an increase of $120.1 million in accounts payable and other liabilities. Additionally, cash flows from operating activities included construction allowances from landlords of $1.2 million, which funded a portion of the capital expenditures related to store leasehold improvements in relocated, expanded and remodeled stores.

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During the year-to-date 2016, we generated $5.3 million in cash from operating activities. Net loss, adjusted for non-cash expenses, provided cash of approximately $30.6 million.  Changes in operating assets and liabilities used net cash of approximately $32.3 million, which included increases of $133.3 million in merchandise inventories, primarily due to the seasonal build of inventories, and $18.5 million in other assets, partially offset by an increase of $119.5 million in accounts payable and other liabilities primarily related to inventory purchases. Additionally, cash flows from operating activities included construction allowances from landlords of $7.0 million, which funded a portion of the capital expenditures related to leasehold improvements in our new corporate office building and store leasehold improvements in relocated, expanded and remodeled stores.

Investing Activities

Net cash used in investing activities was $59.1 million for the year-to-date 2017, compared to $66.8 million for the year-to-date 2016.

Capital expenditures were $25.3 million for the year-to-date 2017, compared to $67.9 million for the year-to-date 2016, reflecting a decrease in store expansions and remodels. We received construction allowances from landlords of $1.2 million in the year-to-date 2017 and $7.0 million in the year-to-date 2016 to fund a portion of the capital expenditures related to store leasehold improvements and our new corporate office building. These funds are recorded as a deferred rent credit on the balance sheet and are recognized as an offset to rent expense over the lease term commencing with the date the allowances are earned.

During the year-to-date 2017, we paid $36.1 million for the Gordmans Acquisition (see Note 8 to the condensed consolidated financial statements), which was funded with existing cash and availability under the Revolving Credit Facility.

Financing Activities

Net cash provided by financing activities for the year-to-date 2017 was $94.5 million, compared to $63.9 million for the year-to-date 2016. The change is primarily due to increased net borrowings under the Revolving Credit Facility.

We use the Revolving Credit Facility to provide financing for working capital and general corporate purposes, as well as to finance capital expenditures and to support our letter of credit requirements. Borrowings are limited to the availability under a borrowing base that is determined principally on eligible inventory as defined by the Revolving Credit Facility agreement. Inventory, cash and cash equivalents are pledged as collateral. The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the Revolving Credit Facility agreement. For the year-to-date 2017, the weighted average interest rate on outstanding borrowings and the average daily borrowings were 2.62% and $221.7 million, respectively, compared to 1.83% and $188.0 million for the year-to-date 2016. The increase in average daily borrowings for the year-to-date 2017 compared to the year-to-date 2016 includes the Gordmans Acquisition and related costs.

Letters of credit issued under the Revolving Credit Facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At October 28, 2017, outstanding letters of credit totaled approximately $7.3 million. These letters of credit expire within 12 months of issuance, but may be renewed. Excess borrowing availability under the Revolving Credit Facility at October 28, 2017 was $157.4 million.

The Revolving Credit Facility agreement contains covenants which, among other things, restrict, based on required levels of excess availability, (i) the amount of additional debt or capital lease obligations, (ii) the payment of dividends to $30.0 million in a fiscal year, and (iii) the repurchase of common stock under certain circumstances. The agreement also contains a fixed charge coverage ratio covenant in the event excess availability is below a defined threshold or an event of default has occurred. At October 28, 2017, we were in compliance with all of the debt covenants of the agreement and we expect to remain in compliance.

During the year-to-date 2017, we paid $7.1 million in cash dividends. On November 16, 2017, our Board declared a quarterly cash dividend of $0.05 per share of common stock, payable on December 13, 2017 to shareholders of record at the close of business on November 28, 2017.

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Recent Accounting Standards

Disclosure concerning recent accounting standards is incorporated by reference to Note 1 of our Condensed Consolidated Financial Statements (Unaudited) contained in this Form 10-Q.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to market risk from exposure to changes in interest rates on borrowings under the Revolving Credit Facility. An increase or decrease of 10% in interest rates would not have a material effect on our financial condition, results of operations, or liquidity.

ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have each concluded that such disclosure controls and procedures were effective as of the end of the period covered by this report.

Internal Control Over Financial Reporting

As defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act, the term “internal control over financial reporting” means a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material adverse effect on the financial statements.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. There were no changes in our internal control over financial reporting during the three months endedOctober 28, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

No response is required under Item 103 of Regulation S-K.

ITEM 1A.RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A (Risk Factors) of the Form 10-K. There have been no material changes from the risk factors previously disclosed in our Form 10-K, except for the addition of the risk factor that follows:

Failure to successfully integrate the Gordmans business and convert the Gordmans business to off-price retail operations, and to do so in the time frame we anticipate, may adversely affect our results of operations and financial condition. The acquisition involves numerous risks and uncertainties, including the following:

• The potential loss of distributors, vendors and other business partners following the Gordmans acquisition.

• The potential loss of customers as we rebuild inventory levels and implement new pricing and marketing strategies in the Gordmans off-price stores.

• We may not be able to attract or retain key employees with experience in off-price retail operations.

• We may be unable to adapt our supply chain, or convert the former Gordmans supply chain, well enough or quickly enough to support off-price retail operations.

• Projected sales and margins for the Gordmans off-price stores may not be achieved.

• Integration of the Gordmans business may take longer or be more costly than anticipated.

If we are not able to successfully and timely integrate the Gordmans business and operate the Gordmans business as profitably was we plan, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected, which may adversely affect our results of operations and financial condition.

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ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On March 7, 2011, our Board approved a stock repurchase program (“2011 Stock Repurchase Program”), which authorized us to repurchase up to $200.0 million of our outstanding common stock. The 2011 Stock Repurchase Program will expire when we have exhausted the authorization, unless terminated earlier by our Board. Through October 28, 2017, we repurchased approximately $141.6 million of our outstanding common shares under the 2011 Stock Repurchase Program. Also in March 2011, our Board authorized us to repurchase shares of our outstanding common stock equal to the amount of the proceeds and related tax benefits from the exercise of stock options, stock appreciation rights and other equity grants. Purchases of shares of our common stock may be made from time to time, either on the open market or through privately negotiated transactions and are financed by our existing cash, cash flow and other liquidity sources, as appropriate.

The table below sets forth information regarding our repurchases of common stock during the three months endedOctober 28, 2017:

ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares Purchased (a)	Average Price Paid Per Share (a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b)
July 30, 2017 to August 26, 2017	6,249	$	1.84	—	$	58,351,202
August 27, 2017 to September 30, 2017	20,312	1.85		—	$	58,351,202
October 1, 2017 to October 28, 2017	4,797	1.86		—	$	58,351,202
Total	31,358	$	1.85	—

^(a) Although we did not repurchase any of our common stock during the three months endedOctober 28, 2017 under the 2011 Stock Repurchase Program:

• We reacquired 10,580 shares of common stock from certain employees to cover tax withholding obligations from the vesting of restricted stock at a weighted average acquisition price of $1.82 per common share; and

• The trustee of the grantor trust established by us for the purpose of holding assets under our deferred compensation plan purchased an aggregate of 20,778 shares of our common stock in the open market at a weighted average price of $1.87 in connection with the option to invest in our stock under the deferred compensation plan and reinvestment of dividends paid on our common stock held in trust in the deferred compensation plan.

^(b) Reflects the $200.0 million authorized under the 2011 Stock Purchase Program, less the $141.6 million repurchased as of October 28, 2017 using our existing cash, cash flow and other liquidity sources since March 2011.

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ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

None.

ITEM 5.OTHER INFORMATION

None.

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ITEM 6.EXHIBITS

The following documents are the exhibits to this Form 10-Q. For convenient reference, each exhibit is listed according to the Exhibit Table of Item 601 of Regulation S-K.

Exhibit Number	Description
10.1*#	Amendment No. Five to Amended and Restated Private Label Credit Card Plan Agreement dated as of August 11, 2017, between Stage Stores, Inc. and Comenity Bank.
31.1*	Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

_______________________________________

*	Filed electronically herewith.
#	Certain confidential portions marked with a [****] have been omitted pursuant to a confidential treatment request that has been filed separately with the U.S. Securities and Exchange Commission.

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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 thereunto duly authorized.

	STAGE STORES, INC.
Dated: December 7, 2017	/s/ Michael L. Glazer
	Michael L. Glazer
	President and Chief Executive Officer
	(Principal Executive Officer)
Dated: December 7, 2017	/s/ Oded Shein
	Oded Shein
	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial Officer)

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EX-10.1

EXHIBIT 10.1

CONFIDENTIAL TREATMENT REQUESTED

THIS DOCUMENT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. REDACTED MATERIAL IS MARKED WITH A [****] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT NO. FIVE

TO

AMENDED AND RESTATED

PRIVATE LABEL CREDIT CARD PLAN AGREEMENT

BETWEEN COMENITY BANK

AND

STAGE STORES, INC.

SPECIALTY RETAILERS, INC.

THIS AMENDMENT NO. FIVE (“Gordmans Amendment”) to that certain AMENDED and RESTATED PRIVATE LABEL CREDIT CARD PLAN AGREEMENT entered into as of the 8^th day of August, 2012 and effective as of the 1^st day of August 2012 (“Agreement”) among Stage Stores, Inc. (“SSI”) and Specialty Retailers, Inc. (“SRI”) (with SSI and SRI hereinafter collectively referred to as “Stage”) and Comenity Bank (formerly known as World Financial Network Bank) (“Bank”), is entered into by and between Bank and SSI on the 11^th day of August, 2017 (“Gordmans Amendment Execution Date”).

WHEREAS, Stage and Bank previously entered into the Agreement pursuant to which, among other things, Stage requested Bank to, and Bank agreed to, extend credit to qualifying individuals in the form of private label open-ended credit card accounts for the purchase of Goods and/or Services from Stage through designated Sales Channels and to issue Credit Cards to qualifying individuals under the Stage Nameplates.

WHEREAS, SRI, the wholly owned operating subsidiary of SSI and currently the employer of all Stage employees, signed the Agreement solely for purposes of Section 13.1(a) of the Agreement, thereby agreeing that the Amended and Restated Private Label Credit Card Program Agreement dated March 5, 2004 by and among SSI, SRI and Bank was terminated in its entirety upon the full execution of the Agreement and thereby terminating SRI’s status as a separate party to the Agreement effective August 1, 2012.

WHEREAS, SSI and Bank entered into Amendment No. One to the Agreement effective as of February 1, 2013, Amendment No. Two to the Agreement effective as of February 13, 2014 (no longer in effect), Amendment No. Three to the Agreement effective as of May 4, 2014 (no longer in effect), and Amendment No. Four to the Agreement effective as of March 28, 2016.

WHEREAS, SRI has acquired certain assets from the bankruptcy estate of Gordmans, Inc., and its affiliates (collectively, “Gordmans, Inc.”), including the Gordmans Mark (as defined below) and the right to cause Gordmans, Inc. to assume and assign to SRI the leases of certain physical retail locations of Gordmans, Inc., and SRI is operating physical locations as retail stores operating under the Gordmans Mark.

WHEREAS, pursuant to the Gordmans Agreement (as defined below), Bank issues private label credit cards branded with the Gordmans Mark that may be used for the purchase of goods and services sold in the sales channels operated by Gordmans, Inc.

WHEREAS, Stage and Bank intend that certain credit cards originated under the Gordmans Agreement and the corresponding accounts shall be converted into Credit Cards and Accounts under the Plan in accordance with the terms of this Gordmans Amendment.

WHEREAS, the Gordmans Agreement was rejected on July 31, 2017.

WHEREAS, SSI and Bank now desire to amend the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the terms and conditions hereof, and for other good and valuable consideration, the receipt of which is hereby mutually acknowledged by the parties, SSI and Bank agree as follows:

1. Definitions; References. Capitalized terms not otherwise defined in this Gordmans Amendment are used herein as defined in the Agreement. Section 1.1 of the Agreement is amended to add or modify, as appropriate, the following terms:

“Account” is amended by adding the following sentence to the end of the current definition: “Additionally, Gordmans-Converted Accounts shall be considered Accounts for purposes of this Agreement.”

“Cardholder” is amended by adding the following sentence to the end of the current definition: “For clarity, holders and authorized users of Gordmans-Converted Accounts shall be considered Cardholders for purposes of this Agreement.”

“Covered Gordmans Stores” shall mean the retail locations listed in Schedule 1.1(d) attached hereto.

“Credit Card” is amended by adding the following sentence to the end of the current definition. “For clarity, private label credit cards issued by Bank that are associated with Gordmans Accounts shall be considered Credit Cards for purposes of this Agreement.”

“Gordmans Accounts” shall mean each Gordmans-Converted Account and each Account opened under the Plan after the Gordmans Amendment Effective Date under the Gordmans Mark.

“Gordmans Agreement” shall mean the Private Label Credit Card Program Agreement between World Financial Network National Bank and Gordmans, Inc. dated as of September 6, 2002, as amended by that certain Amendment to Private Label Credit Card Program Agreement between World Financial Network National Bank and Gordmans, Inc. dated as of April 7, 2006, Second Amendment to Private Label Credit Card Program Agreement between World Financial National Bank (as successor by conversion to World Financial Network National Bank ) and Gordmans, Inc. dated as of February 1, 2012 and Third Amendment to Private Label Credit Card Program Agreement between Comenity Bank (as successor to World Financial National Bank) and Gordmans, Inc. dated as of January 23, 2017.

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“Gordmans Amendment Effective Date” shall mean the date on which the retail systems of the Covered Gordmans Stores are converted from the platform operated by or on behalf of Gordmans, Inc. to the platform operated by or on behalf of SRI as notified by Stage to the Bank, which was June 27, 2017.

“Gordmans-Converted Account” shall mean each individual open-end revolving line of credit originated under the Gordmans Agreement for which no less than ten percent (10%) of the in-store purchases on such account in the 18-month period immediately preceding the Gordmans Amendment Effective Date occurred, in the aggregate, in one or more Covered Gordmans Stores, regardless of whether such line of credit is open to buy, is delinquent, is in default, or has been written-off, but excluding any lines of credit for which the Cardholder has declared bankruptcy, which have been closed for fraud, or which are subject to pending litigation with Bank. For clarity, any open-end revolving line of credit originated under the Gordmans Agreement that has not had an in-store Purchase in a Covered Gordmans Store during the 18-month period immediately preceding the Gordmans Amendment Effective Date shall not be considered a Gordmans-Converted Account.

“Gordmans Mark” shall mean any trademark, service mark, or trade name acquired by SRI from Gordmans, Inc. and added as a Stage Mark pursuant to this Gordmans Amendment.

“Gordmans Stores” shall mean (i) any Covered Gordmans Stores, (ii) any physical retail location owned or operated by SRI in the United States under the Gordmans Mark that is opened by SRI after the Gordmans Amendment Effective Date and (iii) any retail ecommerce website owned and operated by or on behalf of SRI specifically under the Gordmans Marktargeting Customers residing in the United States. For the sake of clarity, Gordmans Stores does not include stage.com. As of the Gordmans Amendment Effective Date, the only Gordmans Stores will be the Covered Gordmans Stores.

“Sales Channels” is amended by adding the following sentence to the end of the current definition: “For clarity, all Gordmans Stores shall be considered Sales Channels for purposes of this Agreement.”

“Stage Nameplate” is amended by adding “, Gordmans” to clause (i), immediately after “Peebles”.

2. Termination of Credit Cards Originated under the Gordmans Agreement. A new Section 2.6 is added to the Agreement as follows:

“2.6 Termination of Credit Cards Originated under the Gordmans Agreement.

(a)On or before the Gordmans Amendment Execution Date, Bank shall cease accepting applications for credit card accounts under the Gordmans Agreement;

(b)On or before [****] Bank shall cease to approve transactions initiated with credit card accounts originated under the Gordmans Agreement that are not Gordmans-Converted Accounts;

3

(c)On or before the Gordmans Amendment Execution Date, Bank shall provide any notice of account closure required by the Credit Card Agreements in order to close all credit card accounts originated under the Gordmans Agreement that are not Gordmans-Converted Accounts in accordance with Applicable Law;

(d)On or before [****] Bank shall have terminated utility for all credit card accounts originated under the Gordmans Agreement that are not Gordmans-Converted Accounts and have not otherwise been closed; and

(e)On before [****] Bank shall cease to use the Gordmans Mark in connection with the program established by the Gordmans Agreement; provided, however, that Bank may use the Gordmans Mark in a manner that constitutes nominative fair use solely in connection with collecting outstanding balances on credit card accounts originated under the Gordmans Agreement that are not Gordmans-Converted Accounts.”

3. Transition of Gordmans-Converted Accounts. A new Section 2.7 is added to the Agreement as follows:

“2.7Transition of Gordmans-Converted Accounts.

(a)As between the Bank and SSI, the parties agree that (i) all accounts receivable generated prior to the Gordmans Amendment Effective Date from credit cards originated under the Gordmans Agreement shall accrue to the benefit of the parties to the Gordmans Agreement and any successors thereto, (ii) the parties intend to provide SSI the benefit of all revenue generated on or after [****] under the Gordmans Agreement as if it accrued under the Agreement [****] and (iii) all liability in connection with the credit cards originated under the Gordmans Agreement accruing prior to the Gordmans Amendment Effective Date, including chargebacks, shall remain with the parties to the Gordmans Agreement and any successors thereto. Bank acknowledges that Stage has not assumed and will not assume the Gordmans Agreement and has no obligations thereunder, notwithstanding the provisions of this Gordmans Amendment. In order to give effect to clause (ii) above, Bank has exercised commercially reasonable efforts to calculate the difference between (x) the amount which would be owed to SSI if [****] and (y) the amount owing to Gordmans from the Gordmans-Converted Accounts under the Gordmans Agreement [****] (“Gross-Up Amount”). Based upon Bank’s calculations, the parties have mutually agreed that the total sum of the Gross-Up Amount is [****]. Additionally, the parties have agreed that SSI is entitled to payment of an additional [****] as payment for the [****] Monthly Net Portfolio Yield. Within 10 Business Days following the Gordmans Amendment Execution Date, Bank shall pay to SSI the sum of [****] as payment for the Gross-Up Amount and the [****]

(b)As of the Gordmans Amendment Effective Date, (i) all Gordmans-Converted Accounts shall be considered Accounts under the Agreement, (ii) all holders and users of Gordmans-Converted Accounts shall be considered Cardholders under the Agreement, (iii) all credit cards issued to holders and users of Gordmans-Converted Accounts pursuant to the Gordmans Agreement shall be considered Credit Cards under the Agreement, (iv) all Covered Gordmans Stores shall be considered Sales Channels under the Agreement; and (v) the Gordmans Mark shall be considered a Stage Mark under the Agreement.

4

(c)As between Bank and SSI, the parties agree that beginning on the Gordmans Amendment Effective Date, (i) all transactions initiated with a Gordmans-Converted Account shall be subject to the terms of this Agreement, and (ii) all accounts receivable and revenue generated from Gordmans-Converted Accounts after the Gordmans Amendment Effective Date shall accrue to the benefit of the parties to this Agreement as Accounts hereunder. Further, as between Bank and SSI, the parties agree that Stage shall assume no interest in or liability for credit cards originated under the Gordmans Agreement that do not become Gordmans-Converted Accounts.

(d)Beginning on or before [****] Bank shall accept applications for Credit Cards under the Agreement in Gordmans Stores.

(e)In connection with the conversion of Gordmans-Converted Accounts, Bank shall not alter or modify account numbers issued to holders of Gordmans-Converted Accounts pursuant to the Gordmans Agreement without Stage’s prior written consent, which consent shall not be unreasonably withheld or delayed; provided, however, that this subsection (f) shall not restrict Bank from modifying account numbers for Gordmans-Converted Accounts in cases of suspected or actual fraud in a manner that is consistent with its standard policies or any other purposes permitted under the Agreement.

(f)Between the Gordmans Amendment Effective Date and [****] Bank shall use commercially reasonable efforts to amend the credit card agreement between holders of Gordmans-Converted Accounts and Bank so that the terms of such credit card agreement are the terms of the Credit Card Agreement under the Plan established and operated under the Agreement. Bank shall amend such credit card agreements in compliance with Applicable Law and provide Cardholders such notices and disclosures regarding such changes as are required by Applicable Law.

(g)Bank shall [****] the redesign and reissuance of Credit Card plastics for the Gordmans-Converted Accounts, which design shall be subject to Stage’s review and approval as set forth in Section 3.4 of the Agreement. Bank shall commence and complete such reissuance in [****]. Such reissuance shall not be considered a “Stage Re-issuance” as defined in Section 3.4(e)(i) of the Agreement. [****]

(h)Bank shall deliver to Stage the information described in Section 3.13(d)(ii) and Schedule 3.13(d) of the Agreement regarding the holders of the Gordmans-Converted Accounts no later than [****]

(i)Promptly following the Gordmans Amendment Execution Date, the parties shall mutually agree to a marketing plan for the Stage Nameplate operating under the Gordmans Mark. Further, the parties acknowledge and agree that it is their intent that the initial and annual marketing plans that will be adopted for the Stage Nameplate operating under the Gordmans Mark will be separate and distinct from the marketing plan(s) adopted for the other Stage Nameplates pursuant to Section 2.4(a) of the Agreement and not subject to the requirements set forth in Section 2.4(c)-(d) of the Agreement.

(j)Bank shall support cross acceptance of (i) Credit Cards bearing the Gordmans Mark at Sales Channels operating under a Stage Nameplate other than Gordmans, and (ii) Credit Cards bearing Stage Mark other than the Gordmans Mark at Gordmans Stores,

5

in each case as soon as possible following the Gordmans Amendment Execution Date, but in no event later than [****]

(k)Notwithstanding any other provision of this Agreement, including Section 3.10(a)-(c) and paragraph (c) of Schedule 3.5(e), Stage shall have no obligation to offer a Cardholder Loyalty Program in connection with Gordmans Accounts; provided, however, that if Stage elects to offer a Cardholder Loyalty Program in connection with Gordmans Accounts, each party shall have the obligations set forth under the Agreement with respect to such Cardholder Loyalty Program.

(l)Notwithstanding Section 3.5(e) and Schedule 3.5(e) of the Agreement, the Parties agree that (i) the [****] Average shall not apply to Gordmans Stores, (ii) the [****] Rate shall not apply to merchandise sales on Gordmans Accounts and (iii) and the value proposition requirement shall not apply to customers of Gordmans Stores or holders of Gordmans Accounts.

(m)Except as otherwise specified herein or in the Agreement, each party shall be responsible for funding its own costs and expenses in connection with carrying out its obligations hereunder.”

4. Section 3.9 - Customer Service. Section 3.9 of the Agreement is amended by adding a new subsection (e) as follows:

“Bank shall maintain a separate toll-free telephone line for the provision of customer service for the Gordmans Accounts. Bank shall exercise commercially reasonable efforts to maintain this telephone line at the telephone number utilized for Gordmans, Inc. prior to the Gordmans Agreement Execution Date.”

5. Section 3.15 - Communications and Systems Changes. The Agreement is amended by adding a new Schedule 3.15(c) as attached hereto and a new subsection (c) to Section 3.15 as follows:

“(c) Bank shall complete those changes set forth on Schedule 3.15(c) by the completion date set forth in Schedule 3.15(c).”

6. Section 7.5 - Stage Marks. The following sentence is added to the end of Section 7.5 of the Agreement as follows:

“Further, Stage has the legal right to use and permit the Bank to use, to the extent set forth in the Agreement the Gordmans Mark.”

7. Section 7.8 -Stage Representations and Warranties. A new Section 7.8 is added to the Agreement as of the Gordmans Amendment Execution Date as follows:

“7.8Gordmans-Converted Accounts. Stage represents and warrants that it has all rights necessary, including under Applicable Law, to fulfill its obligations as, and at the time, required by the Gordmans Amendment.”

8. Section 9.6 - Bank Representations and Warranties. A new Section 9.6 is added to the Agreement as of the Gordmans Amendment Execution Date as follows:

6

“9.6Gordmans-Converted Accounts. Bank represents and warrants that it has all rights necessary, including under Applicable Law, to fulfill its obligations as, and at the time, required by the Gordmans Amendment. Without limiting the generality of the foregoing, Bank represents and warrants that it has all rights necessary, including under Applicable Law, to convert the Gordmans-Converted Accounts to Accounts under the Agreement and to carry out its obligations under the Agreement. Bank further represents and warrants that it has all rights necessary, including under Applicable Law, the Gordmans Agreement, the terms and conditions of its agreements with the holders of Gordmans-Converted Accounts and the privacy policy applicable to such Gordmans Converted Accounts, to share with Stage all information about the holders of Gordmans-Converted Accounts that Bank is required to share with Stage pursuant to the Agreement, including Section 3.13(d)(ii) and Schedule 3.13 of the Agreement, and to authorize Stage to use and disclose such information regarding the holders of Gordmans-Converted Accounts to the same extent permitted under the Agreement.”

9. Section 11.1 - Indemnification. Section 11.1(b) of the Agreement is amended as of the Gordmans Amendment Execution Date by deleting the word “and” immediately preceding clause (vii) and adding the following language immediately after clause (vii): “; (viii) the claims of any third party resulting from or related to a Gordmans-Converted Account that arose prior to the Gordmans Amendment Execution Date, including any protection programs, enhancement marketing services or other ancillary products or services offered or provided by Bank to holders of such Gordmans-Converted Accounts and any loyalty program offered to holders of Gordmans-Converted Accounts prior to the Gordmans Amendment Execution Date; (ix) the claims of any third party resulting from or related to accounts originated under the Gordmans Agreement which are not Gordmans-Converted Accounts; and (x) the claims of any third party, including any claims made by Gordmans, Inc. or its bankruptcy estate or trustee arising out of or relating to an alleged or actual breach by Bank of the Gordmans Agreement”.

10. Section 12.1 - Term and Expiration. Section 12.1 of the Agreement is hereby deleted in its entirety and replaced with the following:

“12.1 Term and Expiration. Upon execution by authorized representatives of both parties, and unless terminated as provided herein, this Agreement shall become effective as of the Effective Date and remain in effect until [****] (“Initial Term”). At Bank’s sole discretion, Bank may elect to extend the Initial Term for an additional two (2) years by providing written notice to Stage of such election on or before [****] (“Option”). Upon the expiration of the Initial Term, this Agreement shall automatically renew for successive [****] terms (each a “Renewal Term”) thereafter, unless either party provides the other with at least [****] months’ prior written notice of its intention not to renew this Agreement beyond the expiration of the Initial or then-current Renewal Term, as applicable.”

11. Schedule 1.1(b) - Stage Marks. The parties hereby agree that Schedule 1.1(b) of the Agreement is amended as of the Gordmans Amendment Effective Date by adding Schedule 1.1(b) attached hereto.

12. Schedule 1.1(d) - Covered Gordmans Stores. As of the Gordmans Amendment Effective Date, Schedule 1.1(d) attached hereto is hereby added to the Agreement.

7

13. Schedule 1.3(e) - Measurement Period Summary. The parties hereby agree that, upon Bank’s exercise of the Option, Schedule 1.3(e) of the Agreement is amended as follows:

(a)By changing measurement period 10 to be the full calendar year [****], adding measurement period 11 to be the full calendar year [****] and adding measurement period 12 to be the period from [****] through [****]

(b)By making the $/Account mailed for each new measurement period in (a) above, the prior measurement period cost multiplied by the annual CPI adjustment.

(c)By making the Paperless Statement Target for each new measurement period [****]

14. Schedule 2.4(c) - Bank’s Marketing Commitments. The parties hereby agree that, as of the Gordmans Amendment Execution Date, paragraph 3 of Schedule 2.4(c) of the Agreement is amended and restated in its entirety to read as follows:

"Fund the redesign and reissuance of the Credit Card plastics for each Stage Nameplate four (4) times during the Term: (i) first, within the twelve (12) month period beginning on the Effective Date; (ii) second, during the calendar year [****], but in any case before [****]; (iii) third, during the month of [****] or at such other time as agreed by the parties; and (iv) fourth, during the calendar year [****] but in any case before [****] or at such other time as agreed by the parties. The Gordmans brand shall not be included in the first two such reissuances. Each such re-issuance shall include substantially all Cardholders who have made a Purchase using an Account during the [****]month period immediately prior to the re-issuance (excluding a control population of such Cardholders). Bank will also test re-issuance to Cardholders who have not made a Purchase using an Account during the [****] month period immediately prior to the re-issuance but who have made a Purchase using an Account during the [****] month period beginning [****] months immediately prior to the re-issuance and ending [****] months immediately prior to the re-issuance. Notwithstanding the foregoing, any such re-issuance of the Credit Card plastics shall be in accordance with Applicable Law and Bank’s Corporate Reissuance Policy. Should any such re-issuance of the Credit Card plastics not comply with Applicable Law or Bank’s Corporate Reissuance Policy, in lieu of the reissuance, Bank shall, promptly following such determination, pay to Stage an amount equal [****] and Stage shall use such funds, in its sole reasonable discretion, to fund credit marketing program(s)."

15. Schedule 3.2 - Plan Teams. Schedule 3.2 of the Agreement is amended as of the Gordmans Amendment Execution Date as follows:

(a)The two parentheticals in subsection (d) that read “(excluding Steele’s)” are replaced with the following: “(excluding Gordmans)”.

(b)The following paragraph is added as a separate paragraph following the final paragraph of subsection (d):

“Upon the request of Stage, Bank shall ensure that at least one (1) individual member of the field sales team is assigned solely to physical retail Sales Channels

8

operating under the Gordmans Mark at all times, unless and until Stage requests a realignment of the field sales team.”

16. Schedule 6.1 - Plan Economics. The parties hereby agree that Schedule 6.1 of the Agreement is amended as of the Gordmans Amendment Execution Date as follows:

[****]

17. Counterparts; Effectiveness. This Gordmans Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all of such counterparts shall together constitute one and the same instrument. Unless otherwise set forth herein, all provisions of this Gordmans Amendment shall become binding on the Gordmans Amendment Execution Date and become effective as of the Gordmans Amendment Effective Date.

18. General. This Gordmans Amendment shall not be changed, modified or amended except in writing and signed by both of the Parties hereto. The provisions of this Gordmans Amendment shall be considered a part of the Agreement. Except as specifically amended in this Gordmans Amendment, the provisions of the Agreement, as amended, remain unaffected and in full force and effect. The provisions of this Gordmans Amendment shall prevail in the event of any conflict between the provisions hereof and the provisions of the Agreement.

IN WITNESS WHEREOF, SSI and Bank have executed this Gordmans Amendment in a manner and form sufficient to bind them on the Gordmans Amendment Execution Date.

STAGE STORES, INC.	COMENITY BANK (formerly known as
	WORLD FINANCIAL NETWORK BANK)
By: /s/ Oded Shein	By: /s/ John Marion
Oded Shein	John Marion
Printed Name	Printed Name
EVP,CFO	8/14/17 (President)
Title	Title

9

Schedule 1.1(b)

Stage Marks

Word Marks:

Give the Unexpected

gRewards

Gordmans

G Something Unexpected

Something Unexpected

Stylized Design Marks:

10

Schedule 1.1(d)

Covered Gordmans Store

STORE NO.	STREET ADDRESS	CITY	STATE	ZIP CODE
6079	2230 S Promenade Blvd	Rogers	AR	72758
6060	1972 Southgate Road	Colorado Springs	CO	80906
6105	8055 W Bowles Ave	Littleton	CO	80123
6041	10001 Grant St.	Thornton	CO	80229
6072	4601 1st Ave SE	Cedar Rapids	IA	52402
6080	2515 Corridor Way	Coralville	IA	52241
6082	3125 Manawa Centre Dr	Council Bluffs	IA	51501
6002	3860 Elmore Ave	Davenport	IA	52807
6019	1200 SE Army Post Rd	Des Moines	IA	50315
6021	2590 Hubbell Ave	Des Moines	IA	50317
6045	1400 22nd St	Des Moines	IA	50266
6036	5001 Sergeant Rd, Suite 140	Sioux City	IA	51106
6023	2060 Crossroads Blvd #200	Waterloo	IA	50702
6103	2260 N. Eagle Road	Meridian	ID	83646
6059	16740 North Marketplace Blvd	Nampa	ID	83687
6004	1901 N Market	Champaign	IL	61822
6027	81 Ludwig Dr	Fairview Heights	IL	62208
6003	4401 27th St	Moline	IL	61265
6071	7611 North Grand Prairie Dr	Peoria	IL	61615
6107	340 West Washington Street	Peoria	IL	61611
6008	3231 S Veterans Parkway	Springfield	IL	62704
6112	945 East Lewis & Clark Pkway	Clarksville	IN	47129
6083	902 S Thomas Road	Ft Wayne	IN	46804
6076	100 S Creasy Lane, Suite 1400	Lafayette	IN	47905
6084	4430 Grape Road	Mishawaka	IN	46545
6114	710 Porter's Vale Blvd	Valparaiso	IN	46383
6029	3245 Topeka Blvd	Topeka	KS	66611
6028	2057 N Rock Rd, Suite101	Wichita	KS	67206
6081	7011 W Central #300	Wichita	KS	67212
6078	3801 Mall Road	Lexington	KY	40503
6121	5202 Bay Road	Saginaw	MI	48604
6119	4910 Wilson Ave SW	Wyoming	MI	49418
6086	901 County Rd 42 West	Burnsville	MN	55306
6087	8268 Tamarack Village	Woodbury	MN	55125
6124	235 Arnold Crossroads Center	Arnold	MO	63010
6009	687 Gravois Bluffs Blvd	Fenton	MO	63026
6047	13500 A East 40 Hwy	Independence	MO	64055
6048	309 NE Englewood Rd	Kansas City	MO	64118
6063	2259 Missouri State Hwy K	O'Fallon	MO	63366
6032	3303 S Campbell Ave	Springfield	MO	65807
6049	1355 S 5th St	St Charles	MO	63301
6039	3702 Frederick Ave	St Joseph	MO	64506
6073	100 Towne Center Loop	Southaven	MS	38671
6120	1449 East LaSalle Drive	Bismarck	ND	58503
6005	5100 14th Ave SW	Fargo	ND	58103
6006	3501 32nd Ave South	Grand Forks	ND	58201
6113	3220 16th ST SW	Minot	ND	58701

11

6042	850 E 23rd St	Fremont	NE	68025
6022	1111 Allen Dr	Grand Island	NE	68803
6044	5050 N 27th St	Lincoln	NE	68521
6085	1617 Eglin Street	Rapid City	SD	57701
6043	4001 S Louise Avenue	Sioux Falls	SD	57106
6102	1101 West Riverdale Road	Riverdale	UT	84405
6089	11590 South District Drive	South Jordan	UT	84095
6116	2351 Holmgren Way	Ashwaubenon	WI	54304
6109	7450 Green Bay Road, Suite B	Kenosha	WI	53142
6018	131 East Towne Mall	Madison	WI	53704
6065	3701 Rib Mountain Drive	Wausau	WI	54401

12

Schedule 3.15(c)

Communications and Systems Changes

Change Name	Date of Full Implementation	Description of Change
[****]	04/30/18	[•]
[****]	10/31/18	[•]
[****]	10/31/18	[•]
[****]	10/31/18	[•]

20266256_2

13

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael L. Glazer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Stage Stores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	December 7, 2017	/s/ Michael L. Glazer
		Michael L. Glazer
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Oded Shein, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Stage Stores, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	December 7, 2017	/s/ Oded Shein
		Oded Shein
		Executive Vice President,
		Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Stage Stores, Inc. (the “Company”) on Form 10-Q for the quarter ended October 28, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael L. Glazer and Oded Shein, President and Chief Executive Officer and Executive Vice President, Chief Financial Officer and Treasurer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	December 7, 2017	/s/ Michael L. Glazer
		Michael L. Glazer
		President and Chief Executive Officer

/s/ Oded Shein

Oded Shein

Executive Vice President,

Chief Financial Officer and Treasurer

XML

Document and Entity Information - shares	9 Months Ended
	Oct. 28, 2017	Nov. 29, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	STAGE STORES INC
Entity Central Index Key (CIK)	0000006885
Current Fiscal Year End Date	--02-03
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Oct. 28, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		27,627,382
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Oct. 28, 2017	Jan. 28, 2017
ASSETS
Cash and cash equivalents	$ 30,330	$ 13,803
Merchandise inventories, net	578,633	409,384
Prepaid expenses and other current assets	52,376	41,574
Total current assets	661,339	464,761
Property, equipment and leasehold improvements, net of accumulated depreciation of $734,626 and $697,087, respectively	260,870	284,110
Intangible assets	17,135	15,235
Other non-current assets, net	28,237	22,883
Total assets	967,581	786,989
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	214,783	101,985
Accrued expenses and other current liabilities	77,093	66,685
Total current liabilities	291,876	168,670
Long-term debt obligations	268,969	163,749
Other long-term liabilities	70,052	74,410
Total liabilities	630,897	406,829
Commitments and contingencies
Common stock, par value $0.01, 100,000 shares authorized, 32,794 and 32,340 shares issued, respectively	328	323
Additional paid-in capital	416,422	410,504
Treasury stock, at cost, 5,175 shares, respectively	(43,248)	(43,286)
Accumulated other comprehensive loss	(5,021)	(5,648)
(Accumulated deficit) retained earnings	(31,797)	18,267
Total stockholders' equity	336,684	380,160
Total liabilities and stockholders' equity	$ 967,581	$ 786,989

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Oct. 28, 2017	Jan. 28, 2017
Statement of Financial Position [Abstract]
Accumulated depreciation	$ 734,626	$ 697,087
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000	100,000
Common stock, shares issued (in shares)	32,794	32,340
Treasury stock, at cost (in shares)	5,175	5,175

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016	Oct. 28, 2017	Oct. 29, 2016
Income Statement [Abstract]
Net sales	$ 357,236	$ 317,140	$ 1,042,924	$ 988,275
Cost of sales and related buying, occupancy and distribution expenses	285,542	260,550	816,071	779,128
Gross profit	71,694	56,590	226,853	209,147
Selling, general and administrative expenses	100,036	84,564	289,188	260,076
Interest expense	2,001	1,395	5,505	3,616
Loss before income tax	(30,343)	(29,369)	(67,840)	(54,545)
Income tax benefit	(12,621)	(13,735)	(24,873)	(23,492)
Net loss	(17,722)	(15,634)	(42,967)	(31,053)
Other comprehensive income:
Amortization of employee benefit related costs, net of tax of $81, $86, $242 and $256, respectively	132	139	395	417
Pension settlement charge, net of tax of $142	232		232
Total other comprehensive income	364	139	627	417
Comprehensive loss	$ (17,358)	$ (15,495)	$ (42,340)	$ (30,636)
Basic loss per share data:
Basic loss per share	$ (0.64)	$ (0.58)	$ (1.57)	$ (1.15)
Basic weighted average shares outstanding	27,602	27,155	27,468	27,066
Diluted loss per share data:
Diluted loss earnings per share	$ (0.64)	$ (0.58)	$ (1.57)	$ (1.15)
Diluted weighted average shares outstanding	27,602	27,155	27,468	27,066

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016	Oct. 28, 2017	Oct. 29, 2016
Other comprehensive income:
Amortization of employee benefit related costs, tax	$ 81	$ 86	$ 242	$ 256
Pension settlement charge, tax	$ 142		$ 142

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016
Cash flows from operating activities:
Net loss	$ (42,967)	$ (31,053)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation, amortization and impairment of long-lived assets	49,476	54,285
(Gain) loss on retirements of property, equipment and leasehold improvements	(926)	273
Deferred income taxes	(6,065)	1,965
Tax deficiency from stock-based compensation		(3,295)
Stock-based compensation expense	6,191	7,345
Amortization of debt issuance costs	216	164
Deferred compensation obligation	(38)	233
Amortization of employee benefit related costs and pension settlement charge	1,011	673
Construction allowances from landlords	1,228	6,994
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(137,479)	(133,347)
Increase in other assets	(9,709)	(18,527)
Increase in accounts payable and other liabilities	120,137	119,544
Net cash (used in) provided by operating activities	(18,925)	5,254
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(25,342)	(67,934)
Proceeds from insurance and disposal of assets	2,404	1,177
Payments to acquire business	(36,144)
Net cash used in investing activities	(59,082)	(66,757)
Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	426,308	389,701
Payments of revolving credit facility borrowings	(318,851)	(314,783)
Proceeds from long-term debt obligation		5,830
Payments of long-term debt obligations	(5,626)	(3,507)
Payments of debt issuance costs	(8)
Payments for stock related compensation	(192)	(857)
Cash dividends paid	(7,097)	(12,466)
Net cash provided by financing activities	94,534	63,918
Net increase in cash and cash equivalents	16,527	2,415
Cash and cash equivalents:
Beginning of period	13,803	16,487
End of period	30,330	18,902
Supplemental disclosures including non-cash investing and financing activities:
Interest paid	5,221	3,425
Income taxes (refunded) paid	(8,485)	2,931
Unpaid liabilities for capital expenditures	$ 5,362	$ 4,631

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Oct. 28, 2017 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings (Accumulated Deficit) [Member]
Balance at Jan. 28, 2017	$ 380,160	$ 323	$ 410,504	$ (43,286)	$ (5,648)	$ 18,267
Balance (in shares) at Jan. 28, 2017		32,340		5,175
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(42,967)					(42,967)
Other comprehensive income	627				627
Dividends on common stock, $0.25 per share	(7,097)					(7,097)
Deferred compensation			(38)	$ 38
Issuance of equity awards, net		$ 5	(5)
Issuance of equity awards, net (in shares)		454
Tax withholdings paid for net settlement of stock awards	(230)		(230)
Stock-based compensation expense	6,191		6,191
Balance at Oct. 28, 2017	$ 336,684	$ 328	$ 416,422	$ (43,248)	$ (5,021)	$ (31,797)
Balance (in shares) at Oct. 28, 2017		32,794		5,175

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical)	9 Months Ended
	Oct. 28, 2017 $ / shares
Statement of Stockholders' Equity [Abstract]
Dividends on common stock (in dollars per share)	$ 0.250

XML

Basis of Presentation (Notes)

9 Months Ended

Oct. 28, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Stage Stores, Inc. and its subsidiary (“we,” “us” or “our”) have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. Those adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the interim periods have been made. Results of operations for such interim periods are not necessarily indicative of the results of operations for a full year due to seasonality and other factors. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto filed with our Annual Report on Form 10-K for the year ended January 28, 2017 (“Form 10-K”).    

References to a particular year are to our fiscal year, which is the 52- or 53-week period ending on the Saturday closest to January 31st of the following calendar year.  For example, a reference to “2017” is a reference to the fiscal year ending February 3, 2018, and “2016” is a reference to the fiscal year ended January 28, 2017. Fiscal years 2017 and 2016 are comprised of 53 weeks and 52 weeks, respectively. References to the “three months endedOctober 28, 2017” and “three months endedOctober 29, 2016” are for the respective 13-week fiscal quarters. References to the “nine months endedOctober 28, 2017” and “nine months endedOctober 29, 2016” are for the respective 39-week fiscal periods.

On April 7, 2017, we acquired select assets of Gordmans Stores, Inc. and its subsidiaries through a bankruptcy auction (“Gordmans Acquisition”). The results of the Gordmans branded stores that we operated from April 7, 2017 through October 28, 2017 are included in our condensed consolidated statement of operations for the nine months endedOctober 28, 2017 (see Note 8).     

 Recently Adopted Accounting Pronouncements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which modifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and the option to estimate expected forfeitures or recognize forfeitures as they occur. We adopted this standard on a prospective basis in first quarter of 2017. Under the new standard, excess income tax benefits and deficiencies related to awards that vest or settle are recognized in the provision for income taxes as a discrete event in the period in which they occur, which may create significant volatility in the provision for income taxes and earnings. Historically, these amounts were reflected within additional paid-in capital on the balance sheet. In addition, upon adoption excess tax benefits are reflected within operating activities in the statements of cash flows, whereas historically these amounts were reflected as a financing activity. Cash paid to tax authorities on an employee’s behalf for withheld shares continues to be classified as a financing activity in the statement of cash flows. We made a policy election to recognize forfeitures as they occur. For the three and nine months endedOctober 28, 2017, we recognized excess tax deficiencies of $0.1 million and $2.1 million, respectively, in the provision for income taxes. The adoption of the other requirements of this guidance did not have a material impact on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on certain specific cash flow issues including proceeds received from the settlement of insurance claims. This guidance requires cash proceeds received from the settlement of insurance claims to be classified on the statement of cash flows on the basis of the related insurance coverage (that is, the nature of the loss). The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted and is to be applied retrospectively. We adopted this guidance in the first quarter of 2017. The adoption of ASU 2016-15 did not have a material impact on our condensed consolidated statements of cash flows.

 Recent Accounting Pronouncements Not Yet Adopted. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most existing revenue recognition guidance in GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects to be entitled to in exchange for those goods or services. The guidance establishes a five-step revenue recognition model, which includes (i) identifying the contract with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The guidance also requires additional disclosures to describe the nature, timing and uncertainty of revenue and cash flows from contracts with customers. ASU 2014-09 may be applied retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized in retained earnings at the date of adoption. The new revenue standard will be effective for us in the first quarter of fiscal 2018, which begins on February 4, 2018, and we plan to apply the full retrospective method of adoption. We do not expect the adoption to have a material impact on our financial condition, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases(Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. The new standard requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. We plan to make a policy election that will keep leases with an initial term of 12 months or less off of the balance sheet and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Consistent with current GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financing or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. As a result, lessees will be required to put most leases on their balance sheets while recognizing expense on their income statements in a manner similar to current accounting. In addition, this guidance requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. The new standard will be effective for us in the first quarter of fiscal 2019, which begins on February 3, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We continue to evaluate the impact that the adoption of this ASU will have on our consolidated financial statements and disclosures, including the effect of certain optional practical expedients permitted under the transition guidance. Based on our assessment to date, we expect the adoption of ASU 2016-02 will result in a significant increase in lease-related assets and liabilities on our consolidated balance sheets. The ultimate impact of adopting the new standard will depend on our lease portfolio as of the adoption date.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. If a subtotal for operating income is shown on the income statement, then the other components of the net periodic benefit cost must be presented separately from the line item that includes the service cost and outside of any subtotal of operating income. The new standard also requires disclosure of the line item(s) in the income statement that include net periodic benefit costs. Additionally, only the service cost component of the net periodic benefit cost is eligible for capitalization. We plan to adopt ASU 2017-07 in the first quarter of fiscal 2018, which begins on February 4, 2018. The change in presentation of service cost must be applied retrospectively, while the capitalization of service cost must be applied on a prospective basis. The pension plan that we sponsor is frozen, and therefore, service costs no longer accrue under the plan. Upon adoption, we will recognize net periodic pension costs in selling, general and administrative expenses, consistent with our current presentation, and we will disclose this in the notes to the financial statements.

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Stock-Based Compensation (Notes)

9 Months Ended

Oct. 28, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Restricted stock units	$	108		$	—		$	310		$	—
Non-vested stock	1,300			1,362			4,203			5,311
Performance shares	579			(569		)	1,988			2,034
Total compensation expense	1,987			793			6,501			7,345
Related tax benefit	(747		)	(298		)	(2,444		)	(2,762		)
Stock-based compensation expense, net of tax	$	1,240		$	495		$	4,057		$	4,583

As of October 28, 2017, we have unrecognized compensation cost of $12.6 million related to stock-based compensation awards granted, which is expected to be recognized over a weighted average period of 2.1 years.

Stock Appreciation Rights (“SARs”)

Prior to 2012, we granted SARs to our employees, which generally vested 25% annually over a four-year period from the grant date. Outstanding SARs expire, if not exercised or forfeited, within seven years from the grant date. Exercised SARs are settled by the issuance of common stock in an amount equal to the increase in share price of our common stock between the grant date and the exercise date.

The following table summarizes SARs activity for the nine months endedOctober 28, 2017:

Stock Appreciation Rights	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, vested and exercisable at January 28, 2017	177,900		$	17.69
Expired	(65,000	)	16.29
Outstanding, vested and exercisable at October 28, 2017	112,900		$	18.50	0.4	$	—

Restricted Stock Units (“RSUs”)

We grant RSUs to our employees, which vest 25% annually over a four-year period from the grant date. Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date. Unvested RSUs have the right to receive a dividend equivalent payment equal to cash dividends paid on our common stock. RSUs are accounted for as a liability in accordance with accounting guidance for cash settled stock awards. The liability for RSUs is remeasured based on the closing share price of our common stock at each reporting period until the award vests. Compensation expense is recognized ratably over the vesting period and adjusted with changes in the fair value of the liability.

The following table summarizes RSU activity for the nine months endedOctober 28, 2017:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at January 28, 2017	—		$	—
Granted	1,321,250		2.14
Forfeited	(37,500	)	2.09
Outstanding at October 28, 2017	1,283,750		2.14

Non-vested Stock

We grant shares of non-vested stock to our employees and non-employee directors. Non-vested stock awarded to employees vests 25% annually over a four-year period from the grant date. Non-vested stock awarded to non-employee directors cliff vests after one year. At the end of the vesting period, non-vested stock converts one-for-one to common stock. Certain non-vested stock awards have shareholder rights, including the right to vote and to receive dividends. The fair value of non-vested stock awards with dividend rights is based on the closing share price of our common stock on the grant date. The fair value of non-vested stock awards that do not have dividend rights is discounted for the present value of expected dividends during the vesting period. Compensation expense is recognized ratably over the vesting period.

The following table summarizes non-vested stock activity for the nine months endedOctober 28, 2017:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at January 28, 2017	1,596,410		$	10.22
Granted	668,371		2.21
Vested	(562,122	)	11.22
Forfeited	(47,130	)	9.39
Outstanding at October 28, 2017	1,655,529		6.67

The weighted-average grant date fair value for non-vested stock granted during the nine months endedOctober 28, 2017 and October 29, 2016 was $2.21 and $6.78, respectively. The aggregate intrinsic value of non-vested stock that vested during the nine months endedOctober 28, 2017 and October 29, 2016, was $1.2 million and $2.7 million, respectively. The payment of the employees’ tax liability for a portion of the vested shares was satisfied by withholding shares with a fair value equal to the tax liability. As a result, the actual number of shares issued during nine months endedOctober 28, 2017 was 453,677.

Performance Shares

We grant performance shares as a means of rewarding management for our long-term performance based on total shareholder return relative to a specific group of companies over a three-year performance cycle. Performance shares cliff vest following a three-year performance cycle, and if earned are settled in shares of our common stock. The actual number of shares of our common stock that may be earned and issued ranges from zero to a maximum of twice the number of target shares outstanding on the vesting date. Grant recipients do not have any shareholder rights on unvested or unearned shares. The fair value of performance shares is estimated using a Monte Carlo simulation, based on the expected term of the award, a risk-free rate, expected dividends, expected volatility, and share price of our common stock and the specified peer group. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the historical volatility over the expected term. Compensation expense is recorded ratably over the corresponding vesting period.

The following table summarizes information about the performance shares that were outstanding at October 28, 2017:

Period Granted	Target Shares Outstanding at January 28, 2017	Target Shares Granted	Target Shares Vested	Target Shares Forfeited		Target Shares Outstanding at October 28, 2017	Weighted Average Grant Date Fair Value Per Share
2015	158,490	—	—	(4,444	)	154,046	$	28.33
2016	330,233	—	—	(8,527	)	321,706	8.69
2017	—	600,000	—	—		600,000	1.80
Total	488,723	600,000	—	(12,971	)	1,075,752	7.65

The weighted-average grant date fair value for performance shares granted during the nine months endedOctober 28, 2017 and October 29, 2016 was $1.80 and $8.69, respectively. No performance shares vested during the nine months endedOctober 28, 2017 and October 29, 2016, respectively.

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Debt Obligations (Notes)

9 Months Ended

Oct. 28, 2017

Debt Disclosure [Abstract]

Debt Obligations

DEBT OBLIGATIONS

Debt obligations for each period presented consisted of the following (in thousands):

	October 28, 2017		January 28, 2017
Revolving Credit Facility	$	267,159	$	159,702
Finance obligations	1,849		2,708
Other financing	2,986		7,753
Total debt obligations	271,994		170,163
Less: Current portion of debt obligations	3,025		6,414
Long-term debt obligations	$	268,969	$	163,749

We have a $400.0 million senior secured revolving credit facility (“Revolving Credit Facility”) with a seasonal increase to $450.0 million and a $25.0 million letter of credit sublimit. The Revolving Credit Facility matures on December 16, 2021.

We use the Revolving Credit Facility to provide financing for working capital and general corporate purposes, as well as to finance capital expenditures and to support our letter of credit requirements. Borrowings are limited to the availability under a borrowing base that is determined principally on eligible inventory as defined by the Revolving Credit Facility agreement. Inventory, cash and cash equivalents are pledged as collateral. The daily interest rates are determined by a prime rate or LIBOR, plus an applicable margin, as set forth in the Revolving Credit Facility agreement. For the nine months endedOctober 28, 2017, the weighted average interest rate on outstanding borrowings and the average daily borrowings were 2.62% and $221.7 million, respectively.

Letters of credit issued under the Revolving Credit Facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At October 28, 2017, outstanding letters of credit totaled approximately $7.3 million. These letters of credit expire within 12 months of issuance, but may be renewed. Excess availability under the Revolving Credit Facility at October 28, 2017 was $157.4 million.

The Revolving Credit Facility agreement contains covenants which, among other things, restrict, based on required levels of excess availability, (i) the amount of additional debt or capital lease obligations, (ii) the payment of dividends to $30 million in a fiscal year, and (iii) the repurchase of common stock under certain circumstances. The agreement also contains a fixed charge coverage ratio covenant in the event excess availability is below a defined threshold or an event of default has occurred. At October 28, 2017, we were in compliance with all of the debt covenants of the Revolving Credit Facility agreement and we expect to remain in compliance.

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Earnings per Share (Notes)

9 Months Ended

Oct. 28, 2017

Earnings Per Share [Abstract]

Earnings per Share

EARNINGS PER SHARE

The following tables show the computation of basic and diluted loss per common share for each period presented (in thousands, except per share amounts):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Basic:
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Less: Allocation of earnings to participating securities	(66		)	—			(268		)	—
Net loss allocated to common shares	(17,788		)	(15,634		)	(43,235		)	(31,053		)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Basic loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)
	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Diluted:
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Less: Allocation of earnings to participating securities	(66		)	—			(268		)	—
Net loss allocated to common shares	(17,788		)	(15,634		)	(43,235		)	(31,053		)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Add: Dilutive effect of stock awards	—			—			—			—
Diluted weighted average shares outstanding	27,602			27,155			27,468			27,066
Diluted loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)

The number of shares attributable to SARs and non-vested stock grants that would have been considered dilutive securities, but were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	October 28, 2017	October 29, 2016	October 28, 2017	October 29, 2016
Number of anti-dilutive shares due to net loss for the period	—	20	—	42
Number of anti-dilutive SARs due to exercise price greater than average market price of our common stock	113	187	129	198

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Stockholders' Equity (Notes)

9 Months Ended

Oct. 28, 2017

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

STOCKHOLDERS’ EQUITY

On November 16, 2017, our Board of Directors (“Board”) declared a quarterly cash dividend of $0.05 per share of common stock, payable on December 13, 2017 to shareholders of record at the close of business on November 28, 2017.

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Pension Plan (Notes)

9 Months Ended

Oct. 28, 2017

Retirement Benefits [Abstract]

Pension Plan

PENSION PLAN

We sponsor a frozen defined benefit pension plan. The components of net periodic pension cost were as follows (in thousands):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Employer service cost	$	123		$	85		$	368		$	255
Interest cost on pension benefit obligation	363			400			1,090			1,198
Expected return on plan assets	(407		)	(437		)	(1,222		)	(1,312		)
Amortization of net loss	213			225			637			673
Pension settlement charge	374			—			374			—
Net periodic pension cost	$	666		$	273		$	1,247		$	814

During the three and nine months endedOctober 28, 2017, we recognized a non-cash pension settlement charge of $0.4 million as a result of lump sum distributions exceeding interest cost for 2017. This settlement was included in selling, general and administrative expenses in our condensed consolidated statements of operation.

Our funding policy is to make contributions to maintain the minimum funding requirements for our pension obligations in accordance with the Employee Retirement Income Security Act. We may elect to contribute additional amounts to maintain a level of funding to minimize the Pension Benefit Guaranty Corporation premium costs or to cover the short-term liquidity needs of the plan in order to maintain current invested positions. We contributed $0.7 million during the nine months endedOctober 28, 2017, and we expect to contribute an additional $0.2 million in 2017.

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Fair Value Measurements (Notes)

9 Months Ended

Oct. 28, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENTS

We recognize or disclose the fair value of our financial and non-financial assets and liabilities on a recurring and non-recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we assume the highest and best use of the asset by market participants in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.

We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and base the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 –	Quoted prices in active markets for identical assets or liabilities.
Level 2 –	Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 –	Inputs that are both unobservable and significant to the overall fair value measurement reflect our estimates of assumptions that market participants would use in pricing the asset or liability.

Financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

	October 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	18,750	$	18,750	$	—	$	—
	January 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	18,094	$	18,094	$	—	$	—

^(a) The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

^(b) Using the market approach, the fair values of these items represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the nine months endedOctober 28, 2017 and for the fiscal year ended January 28, 2017.

Non-financial assets measured at fair value on a nonrecurring basis were as follows (in thousands):

	October 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	229	$	—	$	—	$	229
	January 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	8,795	$	—	$	—	$	8,795

^(a) Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that property, equipment and leasehold improvements may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its carrying value may not be recoverable, we use a discounted cash flow model, with a 10% discount rate, to estimate the fair value of the underlying long-lived assets. An impairment write-down is recorded if the carrying value of a long-lived asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the nine months endedOctober 28, 2017 and fiscal year 2016, we recognized impairment charges of $0.2 million and $19.9 million respectively. Impairment charges are recorded in cost of sales and related buying, occupancy and distribution expenses.

Due to the short-term nature of cash and cash equivalents, payables and short-term debt obligations, the carrying value approximates the fair value of these instruments. In addition, we believe that the Revolving Credit Facility obligation approximates its fair value because interest rates are adjusted daily based on current market rates.

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Gordmans Acquisition (Notes)

9 Months Ended

Oct. 28, 2017

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

GORDMANS ACQUISITION

On April 7, 2017, we acquired select assets of Gordmans Stores, Inc. and its subsidiaries (collectively, the “Sellers”) through a bankruptcy auction. The terms of the transaction agreement required us to take assignment of a minimum of 50 of the Sellers’ store leases, with rights to take assignment of the leases for an additional seven stores and a distribution center. We also acquired all of the Sellers’ inventory, furniture, fixtures and equipment at the 57 store locations and distribution center, as well as the trademarks and other intellectual property of the Sellers. The Gordmans branded stores, which we intend to operate as an off-price concept, add scale to our business, while allowing us to leverage strategic synergies and our current infrastructure. The acquisition also brings beneficial geographic and customer diversification.

The purchase price for the inventory and other assets acquired from the Sellers was approximately $36.1 million, all of which was paid by the end of the second quarter 2017 using existing cash and availability under the Revolving Credit Facility. We took assignment of 55 of the 57 store locations and the distribution center. We also entered into new leases for three former Gordmans store locations, of which, two were opened in the second quarter 2017 and one opened in August 2017.

The estimated fair values of the assets acquired at the acquisition date were as follows (in thousands):

	April 7, 2017
Inventory	$	31,770
Property, plant and equipment and other assets	4,374
Total	$	36,144

Acquisition and integration related costs were recognized in selling, general and administrative expenses and were as follows for each period presented (in thousands):

	Three Months Ended			Nine Months Ended
	October 28, 2017
Business acquisition costs	$	(39	)	$	9,169

Net sales included in our condensed consolidated statements of operations from the GORDMANS branded stores that we operated beginning on April 7, 2017, were as follows for each period presented (in thousands):

	Three Months Ended		Nine Months Ended
	October 28, 2017
Net sales	$	61,774	$	133,591

Pro forma net sales and earnings for the three and nine months ended October 28, 2017 and October 29, 2016 are not presented due to the impracticability in substantiating this information as the Gordmans Acquisition was limited to select assets and assignment of leases acquired through a bankruptcy auction. Furthermore, the results of operations may have been impacted by the Sellers’ liquidation and may not be indicative of future performance.

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Basis of Presentation (Policies)

9 Months Ended

Oct. 28, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Fiscal Period, Policy [Policy Text Block]

References to a particular year are to our fiscal year, which is the 52- or 53-week period ending on the Saturday closest to January 31st of the following calendar year.  For example, a reference to “2017” is a reference to the fiscal year ending February 3, 2018, and “2016” is a reference to the fiscal year ended January 28, 2017. Fiscal years 2017 and 2016 are comprised of 53 weeks and 52 weeks, respectively. References to the “three months endedOctober 28, 2017” and “three months endedOctober 29, 2016” are for the respective 13-week fiscal quarters. References to the “nine months endedOctober 28, 2017” and “nine months endedOctober 29, 2016” are for the respective 39-week fiscal periods.

Share-based Compensation, Forfeitures [Policy Text Block]

Forfeitures are recognized as they occur.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which modifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and the option to estimate expected forfeitures or recognize forfeitures as they occur. We adopted this standard on a prospective basis in first quarter of 2017. Under the new standard, excess income tax benefits and deficiencies related to awards that vest or settle are recognized in the provision for income taxes as a discrete event in the period in which they occur, which may create significant volatility in the provision for income taxes and earnings. Historically, these amounts were reflected within additional paid-in capital on the balance sheet. In addition, upon adoption excess tax benefits are reflected within operating activities in the statements of cash flows, whereas historically these amounts were reflected as a financing activity. Cash paid to tax authorities on an employee’s behalf for withheld shares continues to be classified as a financing activity in the statement of cash flows. We made a policy election to recognize forfeitures as they occur. For the three and nine months endedOctober 28, 2017, we recognized excess tax deficiencies of $0.1 million and $2.1 million, respectively, in the provision for income taxes. The adoption of the other requirements of this guidance did not have a material impact on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance on certain specific cash flow issues including proceeds received from the settlement of insurance claims. This guidance requires cash proceeds received from the settlement of insurance claims to be classified on the statement of cash flows on the basis of the related insurance coverage (that is, the nature of the loss). The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted and is to be applied retrospectively. We adopted this guidance in the first quarter of 2017. The adoption of ASU 2016-15 did not have a material impact on our condensed consolidated statements of cash flows.

 Recent Accounting Pronouncements Not Yet Adopted. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most existing revenue recognition guidance in GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects to be entitled to in exchange for those goods or services. The guidance establishes a five-step revenue recognition model, which includes (i) identifying the contract with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. The guidance also requires additional disclosures to describe the nature, timing and uncertainty of revenue and cash flows from contracts with customers. ASU 2014-09 may be applied retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized in retained earnings at the date of adoption. The new revenue standard will be effective for us in the first quarter of fiscal 2018, which begins on February 4, 2018, and we plan to apply the full retrospective method of adoption. We do not expect the adoption to have a material impact on our financial condition, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases(Topic 842). The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. The new standard requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. We plan to make a policy election that will keep leases with an initial term of 12 months or less off of the balance sheet and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Consistent with current GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financing or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. As a result, lessees will be required to put most leases on their balance sheets while recognizing expense on their income statements in a manner similar to current accounting. In addition, this guidance requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. The new standard will be effective for us in the first quarter of fiscal 2019, which begins on February 3, 2019. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We continue to evaluate the impact that the adoption of this ASU will have on our consolidated financial statements and disclosures, including the effect of certain optional practical expedients permitted under the transition guidance. Based on our assessment to date, we expect the adoption of ASU 2016-02 will result in a significant increase in lease-related assets and liabilities on our consolidated balance sheets. The ultimate impact of adopting the new standard will depend on our lease portfolio as of the adoption date.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. If a subtotal for operating income is shown on the income statement, then the other components of the net periodic benefit cost must be presented separately from the line item that includes the service cost and outside of any subtotal of operating income. The new standard also requires disclosure of the line item(s) in the income statement that include net periodic benefit costs. Additionally, only the service cost component of the net periodic benefit cost is eligible for capitalization. We plan to adopt ASU 2017-07 in the first quarter of fiscal 2018, which begins on February 4, 2018. The change in presentation of service cost must be applied retrospectively, while the capitalization of service cost must be applied on a prospective basis. The pension plan that we sponsor is frozen, and therefore, service costs no longer accrue under the plan. Upon adoption, we will recognize net periodic pension costs in selling, general and administrative expenses, consistent with our current presentation, and we will disclose this in the notes to the financial statements.

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Stock-Based Compensation (Tables)

9 Months Ended

Oct. 28, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation expense by type of grant

Stock-based compensation expense by type of grant for each period presented was as follows (in thousands):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Restricted stock units	$	108		$	—		$	310		$	—
Non-vested stock	1,300			1,362			4,203			5,311
Performance shares	579			(569		)	1,988			2,034
Total compensation expense	1,987			793			6,501			7,345
Related tax benefit	(747		)	(298		)	(2,444		)	(2,762		)
Stock-based compensation expense, net of tax	$	1,240		$	495		$	4,057		$	4,583

Stock appreciation rights

The following table summarizes SARs activity for the nine months endedOctober 28, 2017:

Stock Appreciation Rights	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, vested and exercisable at January 28, 2017	177,900		$	17.69
Expired	(65,000	)	16.29
Outstanding, vested and exercisable at October 28, 2017	112,900		$	18.50	0.4	$	—

Nonvested restricted stock units

The following table summarizes RSU activity for the nine months endedOctober 28, 2017:

Restricted Stock Units	Number of Units		Weighted Average Grant  Date Fair Value
Outstanding at January 28, 2017	—		$	—
Granted	1,321,250		2.14
Forfeited	(37,500	)	2.09
Outstanding at October 28, 2017	1,283,750		2.14

Non-vested stock

The following table summarizes non-vested stock activity for the nine months endedOctober 28, 2017:

Non-vested Stock	Number of Shares		Weighted Average Grant  Date Fair Value
Outstanding at January 28, 2017	1,596,410		$	10.22
Granted	668,371		2.21
Vested	(562,122	)	11.22
Forfeited	(47,130	)	9.39
Outstanding at October 28, 2017	1,655,529		6.67

Performance shares

The following table summarizes information about the performance shares that were outstanding at October 28, 2017:

Period Granted	Target Shares Outstanding at January 28, 2017	Target Shares Granted	Target Shares Vested	Target Shares Forfeited		Target Shares Outstanding at October 28, 2017	Weighted Average Grant Date Fair Value Per Share
2015	158,490	—	—	(4,444	)	154,046	$	28.33
2016	330,233	—	—	(8,527	)	321,706	8.69
2017	—	600,000	—	—		600,000	1.80
Total	488,723	600,000	—	(12,971	)	1,075,752	7.65

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Debt Obligations (Tables)

9 Months Ended

Oct. 28, 2017

Debt Disclosure [Abstract]

Debt obligations

Debt obligations for each period presented consisted of the following (in thousands):

	October 28, 2017		January 28, 2017
Revolving Credit Facility	$	267,159	$	159,702
Finance obligations	1,849		2,708
Other financing	2,986		7,753
Total debt obligations	271,994		170,163
Less: Current portion of debt obligations	3,025		6,414
Long-term debt obligations	$	268,969	$	163,749

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Earnings per Share (Tables)

9 Months Ended

Oct. 28, 2017

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following tables show the computation of basic and diluted loss per common share for each period presented (in thousands, except per share amounts):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Basic:
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Less: Allocation of earnings to participating securities	(66		)	—			(268		)	—
Net loss allocated to common shares	(17,788		)	(15,634		)	(43,235		)	(31,053		)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Basic loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)
	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Diluted:
Net loss	$	(17,722	)	$	(15,634	)	$	(42,967	)	$	(31,053	)
Less: Allocation of earnings to participating securities	(66		)	—			(268		)	—
Net loss allocated to common shares	(17,788		)	(15,634		)	(43,235		)	(31,053		)
Basic weighted average shares outstanding	27,602			27,155			27,468			27,066
Add: Dilutive effect of stock awards	—			—			—			—
Diluted weighted average shares outstanding	27,602			27,155			27,468			27,066
Diluted loss per share	$	(0.64	)	$	(0.58	)	$	(1.57	)	$	(1.15	)

Number of anti-dilutive securities excluded from computation of diluted loss per share

The number of shares attributable to SARs and non-vested stock grants that would have been considered dilutive securities, but were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive were as follows (in thousands):

	Three Months Ended		Nine Months Ended
	October 28, 2017	October 29, 2016	October 28, 2017	October 29, 2016
Number of anti-dilutive shares due to net loss for the period	—	20	—	42
Number of anti-dilutive SARs due to exercise price greater than average market price of our common stock	113	187	129	198

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Pension Plan (Tables)

9 Months Ended

Oct. 28, 2017

Retirement Benefits [Abstract]

Components of pension cost

We sponsor a frozen defined benefit pension plan. The components of net periodic pension cost were as follows (in thousands):

	Three Months Ended						Nine Months Ended
	October 28, 2017			October 29, 2016			October 28, 2017			October 29, 2016
Employer service cost	$	123		$	85		$	368		$	255
Interest cost on pension benefit obligation	363			400			1,090			1,198
Expected return on plan assets	(407		)	(437		)	(1,222		)	(1,312		)
Amortization of net loss	213			225			637			673
Pension settlement charge	374			—			374			—
Net periodic pension cost	$	666		$	273		$	1,247		$	814

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Fair Value Measurements (Tables)

9 Months Ended

Oct. 28, 2017

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis [Table Text Block]

Financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

	October 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	18,750	$	18,750	$	—	$	—
	January 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other assets:
Securities held in grantor trust for deferred compensation plans (a)(b)	$	18,094	$	18,094	$	—	$	—

^(a) The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

^(b) Using the market approach, the fair values of these items represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the nine months endedOctober 28, 2017 and for the fiscal year ended January 28, 2017.

Assets and liabilities measured at fair value on a nonrecurring basis [Table Text Block]

Non-financial assets measured at fair value on a nonrecurring basis were as follows (in thousands):

	October 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	229	$	—	$	—	$	229
	January 28, 2017
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Store property, equipment and leasehold improvements (a)	$	8,795	$	—	$	—	$	8,795

^(a) Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that property, equipment and leasehold improvements may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its carrying value may not be recoverable, we use a discounted cash flow model, with a 10% discount rate, to estimate the fair value of the underlying long-lived assets. An impairment write-down is recorded if the carrying value of a long-lived asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the nine months endedOctober 28, 2017 and fiscal year 2016, we recognized impairment charges of $0.2 million and $19.9 million respectively. Impairment charges are recorded in cost of sales and related buying, occupancy and distribution expenses.

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Gordmans Acquisition (Tables)

9 Months Ended

Oct. 28, 2017

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The estimated fair values of the assets acquired at the acquisition date were as follows (in thousands):

	April 7, 2017
Inventory	$	31,770
Property, plant and equipment and other assets	4,374
Total	$	36,144

Business Acquisition, Pro Forma Information, Nonrecurring Adjustments [Table Text Block]

Acquisition and integration related costs were recognized in selling, general and administrative expenses and were as follows for each period presented (in thousands):

	Three Months Ended			Nine Months Ended
	October 28, 2017
Business acquisition costs	$	(39	)	$	9,169

Business Acquisition, Revenue of Acquiree [Table Text Block]

Net sales included in our condensed consolidated statements of operations from the GORDMANS branded stores that we operated beginning on April 7, 2017, were as follows for each period presented (in thousands):

	Three Months Ended		Nine Months Ended
	October 28, 2017
Net sales	$	61,774	$	133,591

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Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 28, 2017	Oct. 29, 2016	Oct. 28, 2017	Oct. 29, 2016	Feb. 03, 2018	Jan. 28, 2017
Fiscal Year [Line Items]
Fiscal Period Duration	91 days	91 days	273 days	273 days	371 days	364 days
Share-based Arrangements with Employees and Nonemployees [Abstract]
Share-based compensation, excess tax deficiency from vesting	$ 0.1		$ 2.1
Length of some fiscal years | Minimum
Fiscal Year [Line Items]
Fiscal Period Duration			364 days
Length of some fiscal years | Maximum
Fiscal Year [Line Items]
Fiscal Period Duration			371 days

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Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016	Oct. 28, 2017	Oct. 29, 2016
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,987	$ 793	$ 6,501	$ 7,345
Stock-based compensation expense, tax benefit	(747)	(298)	(2,444)	(2,762)
Stock-based compensation expense, net of tax	1,240	495	$ 4,057	4,583
Weighted average period, unrecognized compensation expense			2 years 1 month
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract]
Unrecognized share-based compensation expense	12,600		$ 12,600
Restricted stock unit
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	108		310
Non-vested stock
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	1,300	1,362	4,203	5,311
Performance shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 579	$ (569)	$ 1,988	$ 2,034

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Stock-Based Compensation Stock Appreciation Rights (SARs) (Details) - Stock Appreciation Rights (SARs) $ / shares in Units, $ in Thousands	9 Months Ended
	Oct. 28, 2017 USD ($) $ / shares shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award annual vesting rights, percentage	25.00%
Award vesting period	4 years
Expiration period if not exercised or forfeited	7 years
Settlement at the end of vesting period	issuance of common stock in an amount equal to the increase in share price of our common stock between the grant date and the exercise date
Number of shares
Outstanding, vested and exercisable at January 28, 2017 | shares	177,900
Expired | shares	(65,000)
Outstanding, vested and exercisable at October 28, 2017 | shares	112,900
Weighted Average Exercise Price [Abstract]
Outstanding, vested and exercisable at January 28, 2017 | $ / shares	$ 17.69
Expired | $ / shares	16.29
Outstanding, vested and exercisable at July 29, 2017 | $ / shares	$ 18.50
Weighted average remaining contractual term
Weighted average remaining period until forfeited	5 months
Aggregate intrinsic value
Aggregate intrinsic value, vested and exercisable | $	$ 0

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Stock-Based Compensation Restricted Stock Units (Details) - Restricted stock unit	9 Months Ended
	Oct. 28, 2017 $ / shares shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award annual vesting rights, percentage	25.00%
Award vesting period	4 years
Settlement at the end of vesting period	Each vested RSU is settled in cash in an amount equal to the fair market value of one share of our common stock on the vesting date, not to exceed five times the per share fair market value of our common stock on the grant date
Number of shares
Granted | shares	1,321,250
Forfeited | shares	(37,500)
Outstanding at October 28, 2017 | shares	1,283,750
Weighted average grant date fair value (in dollars per share)
Grants in period, weighted average grant date fair value (in dollars per share) | $ / shares	$ 2.14
Forfeitures in period, weighted average grant date fair value (in dollars per share) | $ / shares	2.09
Outstanding at October 28, 2017, weighted average grant date fair value (in dollars per share) | $ / shares	$ 2.14

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Stock-Based Compensation Non-vested Stock (Details) - Non-vested stock - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Settlement at the end of vesting period	one-for-one to common stock
Number of shares
Outstanding at January 28, 2017	1,596,410
Granted	668,371
Vested	(562,122)
Forfeited	(47,130)
Outstanding at October 28, 2017	1,655,529
Weighted average grant date fair value (in dollars per share)
Outstanding at January 28, 2017, weighted average grant date fair value (in dollars per share)	$ 10.22
Grants in period, weighted average grant date fair value (in dollars per share)	2.21	$ 6.78
Vested in period, weighted average grant date fair value (in dollars per share)	11.22
Forfeitures in period, weighted average grant date fair value (in dollars per share)	9.39
Outstanding at October 28, 2017, weighted average grant date fair value (in dollars per share)	$ 6.67
Aggregate intrinsic value
Aggregate intrinsic value, vested	$ 1.2	$ 2.7
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract]
Shares issued in period	453,677
Employees
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award annual vesting rights, percentage	25.00%
Award vesting period	4 years
Non-employee directors
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year

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Stock-Based Compensation Performance Shares (Details)	9 Months Ended
	Oct. 28, 2017 shares $ / shares	Oct. 29, 2016 $ / shares
Performance shares
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award requisite service period	3 years
Settlement at the end of vesting period	Converts to common stock ranging from zero to a maximum of twice the number of granted shares outstanding on the vesting date
Number of shares
Outstanding at January 28, 2017	488,723
Granted	600,000
Forfeited	(12,971)
Outstanding at October 28, 2017	1,075,752
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 7.65
Performance shares | Maximum
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiple of the number of granted shares outstanding for issuable shares	2
Performance shares | Minimum
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiple of the number of granted shares outstanding for issuable shares	0
2015 Performance Shares Granted
Number of shares
Outstanding at January 28, 2017	158,490
Forfeited	(4,444)
Outstanding at October 28, 2017	154,046
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 28.33
2016 Performance Shares Granted
Number of shares
Outstanding at January 28, 2017	330,233
Forfeited	(8,527)
Outstanding at October 28, 2017	321,706
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 8.69	$ 8.69
2017 Performance Shares Granted
Number of shares
Granted	600,000
Outstanding at October 28, 2017	600,000
Weighted average grant date fair value (in dollars per share)
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.80

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Debt Obligations (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 28, 2017	Jan. 28, 2017
Debt Instrument [Line Items]
Less: Current portion of long-term debt obligations	$ 3,025	$ 6,414
Long-term debt obligations	268,969	163,749
Total debt obligations	271,994	170,163
Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Revolving credit facility, maximum borrowing capacity	400,000
Revolving credit facility, maximum borrowing capacity with seasonal increase	$ 450,000
Revolving credit facility, expiration date	Dec. 16, 2021
Revolving credit facility, weighted average interest rate during period	2.62%
Revolving credit facility, average daily borrowings	$ 221,700
Revolving credit facility, excess borrowing availability	157,400
Revolving credit facility, dividend restriction amount	30,000
Total debt obligations	267,159	159,702
Line of Credit | Letter of Credit
Debt Instrument [Line Items]
Letter of credit subfacility, maximum borrowing capacity	25,000
Letters of credit outstanding, amount	$ 7,300
Letters of credit, expiration period	12 months
Finance Obligations
Debt Instrument [Line Items]
Total debt obligations	$ 1,849	2,708
Other Financing
Debt Instrument [Line Items]
Total debt obligations	$ 2,986	$ 7,753

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Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016	Oct. 28, 2017	Oct. 29, 2016
Basic EPS from continuing operations:
Net loss	$ (17,722)	$ (15,634)	$ (42,967)	$ (31,053)
Less: Allocation of earnings to participating securities	(66)		(268)
Net loss allocated to common shares	$ (17,788)	$ (15,634)	$ (43,235)	$ (31,053)
Basic weighted average shares outstanding	27,602	27,155	27,468	27,066
Basic loss per share	$ (0.64)	$ (0.58)	$ (1.57)	$ (1.15)
Diluted EPS from continuing operations:
Net loss	$ (17,722)	$ (15,634)	$ (42,967)	$ (31,053)
Less: Allocation of earnings to participating securities	(66)		(268)
Net loss allocated to common shares	$ (17,788)	$ (15,634)	$ (43,235)	$ (31,053)
Basic weighted average shares outstanding	27,602	27,155	27,468	27,066
Diluted weighted average shares outstanding	27,602	27,155	27,468	27,066
Diluted loss per share	$ (0.64)	$ (0.58)	$ (1.57)	$ (1.15)
Non-vested stock | Antidilutive due to net loss
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of anti-dilutive securities excluded from computation of diluted loss per share		20		42
Stock Appreciation Rights (SARs) | Antidilutive due to exercise price
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of anti-dilutive securities excluded from computation of diluted loss per share	113	187	129	198

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Stockholders' Equity (Details) - Subsequent Event - $ / shares	1 Months Ended
	Nov. 16, 2017	Dec. 13, 2017
Subsequent Event [Line Items]
Dividends Payable, Date Declared	Nov. 16, 2017
Dividends Payable, Amount Per Share		$ 0.05
Dividends Payable, Date to be Paid	Dec. 13, 2017
Dividends Payable, Date of Record	Nov. 28, 2017

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Pension Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 28, 2017	Oct. 29, 2016	Oct. 28, 2017	Oct. 29, 2016
Retirement Benefits [Abstract]
Employer service cost	$ 123	$ 85	$ 368	$ 255
Interest cost on pension benefit obligation	363	400	1,090	1,198
Expected return on plan assets	(407)	(437)	(1,222)	(1,312)
Amortization of net loss	213	225	637	673
Pension settlement charge	374		374
Net periodic pension cost	666	$ 273	1,247	$ 814
Contributions by employer			700
Expected future employer contributions, remainder of fiscal year	$ 200		$ 200

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Fair Value Measurements (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Oct. 28, 2017	Jan. 28, 2017
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held in grantor trust for deferred compensation plans	[1],[2]	$ 18,750	$ 18,094
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held in grantor trust for deferred compensation plans	[1],[2]	18,750	18,094
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Store property, equipment and leasehold improvements, fair value	[3]	$ 229	$ 8,795
Fair Value Inputs, Discount Rate		10.00%	10.00%
Impairment charges on store property, equipment and leasehold improvements		$ 200	$ 19,900
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Store property, equipment and leasehold improvements, fair value	[3]	$ 229	$ 8,795

[1] The liability for the amount due to participants corresponding in value to the securities held in the grantor trust is recorded in other long-term liabilities.

[2] Using the market approach, the fair values of these items represent quoted market prices multiplied by the quantities held. Net gains and losses related to the changes in fair value in the assets and liabilities under the various deferred compensation plans are recorded in selling, general and administrative expenses and were nil for the nine months ended October 28, 2017 and for the fiscal year ended January 28, 2017.

[3] Using an undiscounted cash flow model, we evaluate the cash flow trends of our stores at least annually and when events or changes in circumstances, such as a store closure, indicate that property, equipment and leasehold improvements may not be fully recoverable. When a store’s projected undiscounted cash flows indicate its carrying value may not be recoverable, we use a discounted cash flow model, with a 10% discount rate, to estimate the fair value of the underlying long-lived assets. An impairment write-down is recorded if the carrying value of a long-lived asset exceeds its fair value. Key assumptions in estimating future cash flows include, among other things, expected future operating performance, including expected closure date and lease term, and changes in economic conditions. We believe estimated future cash flows are sufficient to support the carrying value of our long-lived assets. Significant changes in the key assumptions used in our cash flow projections may result in additional asset impairments. For the nine months ended October 28, 2017 and fiscal year 2016, we recognized impairment charges of $0.2 million and $19.9 million respectively. Impairment charges are recorded in cost of sales and related buying, occupancy and distribution expenses.

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Gordmans Acquisition (Details) $ in Thousands	3 Months Ended	7 Months Ended	9 Months Ended
	Oct. 28, 2017 USD ($)	Oct. 28, 2017 USD ($)	Oct. 28, 2017 USD ($) stores	Apr. 07, 2017 USD ($) stores
Business Combination, Description [Abstract]
Business Acquisition, Effective Date of Acquisition	Apr. 07, 2017
Business Acquisition, Name of Acquired Entity	Gordmans Stores, Inc.
Incremental Number of Store Locations with Acquisition Rights				7
Business Combination, Reason for Business Combination			The Gordmans branded stores, which we intend to operate as an off-price concept, add scale to our business, while allowing us to leverage strategic synergies and our current infrastructure. The acquisition also brings beneficial geographic and customer diversification.
Payments to acquire business | $			$ 36,144
Number of Gordmans stores acquired			55
Number of Gordmans stores available to be acquired			57
Business Combination, Revenue of Acquiree since Acquisition Date, Actual | $	$ 61,774	$ 133,591
Business Combination, Pro Forma Information, Disclosure Impracticable			Pro forma net sales and earnings for the three and nine months ended October 28, 2017 and October 29, 2016 are not presented due to the impracticability in substantiating this information as the Gordmans Acquisition was limited to select assets and assignment of leases acquired through a bankruptcy auction. Furthermore, the results of operations may have been impacted by the Sellers’ liquidation and may not be indicative of future performance.
New Leases, Former Gordmans Store Locations [Abstract]
New leases for former Gordmans store locations			3
Business Combination, Recognized Identifiable Assets Acquired [Abstract]
Business Combination, Recognized Identifiable Assets Acquired, Inventory | $				$ 31,770
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, Equipment, and Other Assets | $				4,374
Business Combination, Recognized Identifiable Assets Acquired, Assets | $				$ 36,144
Second Quarter 2017
New Leases, Former Gordmans Store Locations [Abstract]
New leases for former Gordmans store locations			2
August 2017
New Leases, Former Gordmans Store Locations [Abstract]
New leases for former Gordmans store locations			1
Minimum
Business Combination, Description [Abstract]
Number of Store Locations with Acquisition Rights				50
Maximum
Business Combination, Description [Abstract]
Number of Store Locations with Acquisition Rights				57
Selling, General and Administrative Expenses
Business Combination, Description [Abstract]
Business Combination, Acquisition Related Costs | $	$ (39)		$ 9,169