8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

November 17, 2005

(Date of Report, date of earliest event reported)

Stage Stores, Inc.

(Exact name of registrant as specified in its charter)

1-14035

(Commission File Number)

NEVADA	91-1826900
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)
10201 Main Street, Houston, Texas	77025
(Address of principal executive offices)	(Zip Code)

(800) 579-2302

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

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

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

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

o Pre-commencement communications pursuant to Rule 14d-12 under the Exchange Act (17 CFR 240.14d-2(b))

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

Item 2.02. Results of Operations and Financial Condition.

On November 17, 2005 Stage Stores, Inc. (the "Company") issued a news release announcing its third quarter results and updating fourth quarter and full year guidance. A copy of the news release is attached to this Form 8-K as Exhibit 99.

This information shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such filing.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99 News release issued by Stage Stores, Inc. on November 17, 2005, announcing its third quarter results and updating fourth quarter and full year guidance.

SIGNATURES

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

	STAGE STORES, INC.
November 21, 2005	/s/ Michael E. McCreery
(Date)	Michael E. McCreery
	Executive Vice President and
	Chief Financial Officer

EX-99

Exhibit 99

NEWS RELEASE

CONTACT:

Bob Aronson

Vice President, Investor Relations

(800) 579-2302

(baronson@stagestores.com)

FOR IMMEDIATE RELEASE

STAGE STORES ANNOUNCES THIRD QUARTER RESULTS; UPDATES FOURTH QUARTER AND FULL YEAR GUIDANCE

--Reports Net Income of $0.31 Per Diluted Share--

HOUSTON, TX, November 17, 2005 -- Stage Stores, Inc. (Nasdaq: STGS) today reported that total sales for the third quarter ended October 29, 2005 rose 7.3% to $306.0 million from $285.3 million for the prior year third quarter ended October 30, 2004. The increase in third quarter sales was driven by a comparable store sales gain of 3.9%, as well as revenue generated by new stores.

The Company further reported that net income increased to $9.1 million, or $0.31 per diluted share, versus $8.9 million, or $0.30 per diluted share, last year.

Jim Scarborough, Chairman, President and Chief Executive Officer, commented, "Despite unseasonably warm weather during much of August and September, and the significant business disruptions we experienced due to two major Gulf Coast hurricanes, we managed to grow our comparable store sales by 3.9%, while our total sales increased by 7.3%, to $306.0 million. Most of our key merchandise categories achieved comparable store sales gains during the period, with our women’s special sizes once again leading the way with a 14.7% increase. Additionally, our Peebles stores continued to benefit from our sales productivity initiatives, and each of our small, mid-size and large market store groups posted positive comparable store sales results.”

Mr. Scarborough continued, “We also accomplished a number of important strategic and operational objectives during the quarter. We opened eleven new stores and expanded our geographic presence to thirty-one states by entering Connecticut and Georgia. We also relocated six stores, remodeled four stores and expanded one store. Unfortunately, we had to close four stores due to damage that they sustained during hurricanes Katrina and Rita, but we currently expect to reopen all of them during 2006. In August, we completed our three-for-two stock split. In September, we issued our first quarterly cash dividend in the amount of 2.5 cents per share. In October, we completed our $30 million Stock Repurchase Program. We also

--more--

Stage Stores Announces

Third Quarter Results

Page - 2

launched our initial two-store test of Clinique, by Estee Lauder in October in our Stage Division, and we are very pleased with our results. Additionally, we continued to make progress on our Peebles South Hill, Virginia distribution center and merchandising system initiatives, and we expect to complete both in January. Lastly, from a humanitarian perspective, we reached out to those whose lives were affected by hurricanes Katrina and Rita. Through a combination of internal initiatives and relief efforts, we provided significant assistance to those in need to help make their recovery a little easier.”

Mr. Scarborough concluded, "Considering the challenges presented to us by the natural disasters during the quarter, I want to thank each of our 13,000 associates for their hard work, their charitable giving, and their dedication."

Total sales for the nine-month period ended October 29, 2005 increased 8.3% to $925.5 million from $854.8 million last year. Comparable store sales increased 5.3% versus an increase of 1.8% for the prior year. Net income for the period was $36.2 million, or $1.22 per diluted share, compared to $32.8 million, or $1.09 per diluted share, last year.

Stock Repurchase Program

The Company reported that, during the third quarter, it repurchased 1,260,549 shares of its common stock at a total cost of $33.6 million, resulting in an average price paid of $26.65 per share. The Company noted that the shares were repurchased using a combination of its $30.0 million Stock Repurchase Program, which has now been completed, and $3.6 million of proceeds that it received from the exercise of employee stock options. The 1.3 million shares repurchased in the third quarter raises the total number of shares that have been repurchased to date by the Company to approximately 6.5 million shares.

Fiscal 2005 - Fourth Quarter and Full Year Outlook

Fiscal 2005 - 4^th Quarter:

The Company reaffirmed comfort with its previously provided sales and net income outlook ranges for the fourth quarter ending January 28, 2006 of $406.0 to $414.0 million, and $18.5 to $19.5 million, respectively, with the expectation of a comparable store sales increase in the low single digits. However, due to an anticipated higher diluted share count for the fourth quarter as compared to the Company’s previous estimate, principally due to a higher stock price assumption, diluted earnings per share are now projected to be in a range of $0.64 to $0.67. In projecting diluted earnings per share, the Company used a diluted share count of 28.9 million

--more--

Stage Stores Announces

Third Quarter Results

Page - 3

shares, which is up from the 28.6 million shares used previously. This compares to the Company’s previously provided earnings guidance for the fourth quarter of $0.65 to $0.68 per diluted share. The Company earned $18.6 million, or $0.62 per diluted share, last year.

In comparing this year’s fourth quarter earnings outlook to last year’s actual results, the Company noted that its fourth quarter projections include non-recurring costs expected to be incurred principally in connection with the closure of its Knoxville, Tennessee distribution center, as well as expenses associated with improvements being made to its South Hill, Virginia distribution center and merchandising system, of approximately $0.8 million, or $0.03 per diluted share, on an after tax basis.

Fiscal 2005 - Full Year:

Updating its outlook for the 2005 fiscal year ending January 28, 2006 to include actual results for the first three quarters of the year, the Company currently anticipates reporting revenues in the range of $1.332 to $1.340 billion, with the expectation of a comparable store sales increase in the upper low single digits. Net income is currently estimated to be in the range of $54.7 to $55.7 million, or earnings of $1.85 to $1.89 per diluted share, using an estimated diluted share count of 29.5 million shares. This outlook compares to earnings of $51.4 million, or $1.72 per diluted share, for the 2004 fiscal year.

Conference Call Information

The Company will host a conference call today at 8:30 a.m. Eastern Time to discuss the third quarter's results. Interested parties can participate in the Company’s conference call by dialing 703-639-1213. Alternatively, interested parties can listen to a live webcast of the conference call by logging on to the Company's web site at www.stagestores.com and then clicking on Investor Relations, then Webcasts, then the webcast link. A replay of the conference call will be available online until midnight on Friday, November 25, 2005.

About Stage Stores

Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small towns and communities through 554 stores located in 31 states. The Company operates under the Bealls, Palais Royal and Stage names throughout the South Central states, and under the Peebles name throughout the Mid-Atlantic, Southeastern and Midwestern states. For more information about Stage Stores, visit the Company's web site at www.stagestores.com.

--more--

Stage Stores Announces

Third Quarter Results

Page - 4

"Safe Harbor" Statement

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including comments regarding the Company's outlook and expectations for the fourth quarter of the 2005 fiscal year and for the full 2005 fiscal year. The Company intends forward looking terminology such as "believes", "expects", "may", "will", "should", "could", "anticipates", "plans" or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the "SEC") on April 28, 2005, in the Company's Quarterly Reports on Form 10-Q as filed with the SEC and other factors as may periodically be described in other Company filings with the SEC.

(Tables to Follow)

Stage Stores, Inc.

Condensed Consolidated Statements of Income

(in thousands, except earnings per share)

(unaudited)

	Thirteen Weeks Ended
	October 29, 2005				October 30, 2004
	Amount		% to Sales (1)		Amount		% to Sales (1)
Net sales	$	306,044		100.0%	$	285,296		100.0%
Cost of sales and related buying, occupancy and distribution expenses		215,328		70.4%		201,170		70.5%
Gross profit		90,716		29.6%		84,126		29.5%
Selling, general and administrative expenses		73,936		24.2%		68,160		23.9%
Store pre-opening costs		1,293		0.4%		1,065		0.4%
Interest expense, net of interest income of $8 and $0, respectively		971		0.3%		774		0.3%
Income before income tax		14,516		4.7%		14,127		5.0%
Income tax expense		5,371		1.8%		5,227		1.8%
Net income	$	9,145		3.0%	$	8,900		3.1%
(1) Percentages may not foot due to rounding.
Basic and diluted earnings per share data:
Basic earnings per share	$	0.34			$	0.33
Basic weighted average shares outstanding		27,030				26,794
Diluted earnings per share	$	0.31			$	0.30
Diluted weighted average shares outstanding		29,502				29,246

Stage Stores, Inc.

Condensed Consolidated Statements of Income

(in thousands, except earnings per share)

(unaudited)

	Thirty-Nine Weeks Ended
	October 29, 2005				October 30, 2004
	Amount		% to Sales (1)		Amount		% to Sales
Net sales	$	925,534		100.0%	$	854,826		100.0%
Cost of sales and related buying, occupancy and distribution expenses		647,888		70.0%		601,574		70.4%
Gross profit		277,646		30.0%		253,252		29.6%
Selling, general and administrative expenses		215,144		23.2%		197,832		23.1%
Store pre-opening costs		2,987		0.3%		1,561		0.2%
Interest expense, net of interest income of $136 and $13, respectively		2,085		0.2%		1,831		0.2%
Income before income tax		57,430		6.2%		52,028		6.1%
Income tax expense		21,249		2.3%		19,250		2.3%
Net income	$	36,181		3.9%	$	32,778		3.8%
(1) Percentages may not foot due to rounding.
Basic and diluted earnings per share data:
Basic earnings per share	$	1.33			$	1.19
Basic weighted average shares outstanding		27,240				27,491
Diluted earnings per share	$	1.22			$	1.09
Diluted weighted average shares outstanding		29,688				30,072

Stage Stores, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par values)

(unaudited)

	October 29, 2005			January 29, 2005
ASSETS
Cash and cash equivalents	$	15,570		$	40,455
Merchandise inventories, net		386,943			281,588
Current deferred taxes		23,549			24,031
Prepaid expenses and other current assets		29,652			22,278
Total current assets		455,714			368,352
Property, equipment and leasehold improvements, net		238,821			212,179
Goodwill		79,353			79,353
Intangible asset		14,910			14,910
Other non-current assets, net		14,461			12,205
Total assets	$	803,259		$	686,999
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	112,832		$	74,957
Income taxes payable		2,469			11,024
Current portion of debt obligations		72			130
Accrued expenses and other current liabilities		68,017			57,080
Total current liabilities		183,390			143,191
Debt obligations		76,460			3,048
Deferred taxes		9,912			11,527
Other long-term liabilities		55,779			47,960
Total liabilities		325,541			205,726
Commitments and contingencies
Common stock, par value $0.01, 75,000 shares authorized, 32,633 and 32,107 shares issued, respectively		326			321
Additional paid-in capital		405,990			396,229
Less treasury stock - at cost, 6,448 and 4,625 shares, respectively		(143,515	)		(94,828	)
Minimum pension liability adjustment		(451	)		(451	)
Retained earnings		215,368			180,002
Stockholders' equity		477,718			481,273
Total liabilities and stockholders' equity	$	803,259		$	686,999

Stage Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Thirty-Nine			Thirty-Nine
	Weeks Ended			Weeks Ended
	October 29, 2005			October 30, 2004
Cash flows from operating activities:
Net income	$	36,181		$	32,778
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		30,043			26,724
Deferred income taxes		(1,133	)		3,773
Amortization of debt issue costs		335			335
Provision for bad debts		-			311
Deferred stock compensation		592			173
Proceeds from sale of proprietary credit card portfolio, net		-			34,764
Construction allowances received from landlords		9,583			2,058
Changes in operating assets and liabilities:
Decrease in accounts receivable and retained interest in receivables sold		-			2,880
Increase in merchandise inventories		(105,355	)		(99,563	)
(Increase) decrease in other assets		(8,549	)		5,323
Increase in accounts payable and other liabilities		38,493			43,101
Total adjustments		(35,991	)		19,879
Net cash provided by operating activities		190			52,657
Cash flows from investing activities:
Additions to property, equipment and leasehold improvements		(58,492	)		(32,260	)
Proceeds from retirement of fixtures and equipment		391			16
Net cash used in investing activities		(58,101	)		(32,244	)
Cash flows from financing activities:
Proceeds from (payments on):
Revolving credit facility, net		73,461			34,210
Finance lease obligations		-			1,650
Repurchases of common stock		(48,687	)		(61,701	)
Debt obligations		(107	)		(832	)
Exercise of stock options		9,174			6,392
Payments of cash dividends		(815	)		-
Net cash provided by (used in) financing activities		33,026			(20,281	)
Net increase (decrease) in cash and cash equivalents		(24,885	)		132
Cash and cash equivalents:
Beginning of period		40,455			14,733
End of period	$	15,570		$	14,865
Supplemental disclosures:
Interest paid	$	1,737		$	1,319
Income taxes paid	$	27,499		$	8,189