SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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

For the fiscal year ended January ~~31, 2015~~28, 2017

(Exact Name of Registrant as Specified in Its Charter)

Securities registered pursuant to Section 12(g) of the Act: None

Large accelerated filer o Accelerated filer þNon-accelerated filer o Smaller reporting company o

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

Portions of the definitive proxy statement relating to the ~~registrant's~~registrant’s Annual Meeting of Shareholders to be held on June ~~11, 2015,~~1, 2017, which will be filed within 120 days of the end of the ~~registrant's~~registrant’s fiscal year ended January ~~31, 2015 ("~~28, 2017 (“Proxy ~~Statement"~~Statement”), are incorporated by reference into Part III of this Form 10-K to the extent described therein.

~~Table of Contents~~

References to a particular year are to Stage Stores, Inc.'s’s 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 ~~"2012" is a reference to the fiscal year ended February 2, 2013, "2013" is a reference to the fiscal year ended February 1, 2014 and "2014"~~“2014” is a reference to the fiscal year ended January 31, ~~2015. 2013~~2015, “2015” is a reference to the fiscal year ended January 30, 2016 and “2016” is a reference to the fiscal year ended January 28, 2017. 2014, 2015 and 2016 each consisted of 52 ~~weeks, while 2012 consisted of 53~~ weeks. Similarly, references to a particular quarter are to Stage Stores, Inc.��s fiscal quarters.

PART I

ITEM 1. BUSINESS

Our Business

Stage Stores, Inc. and its subsidiary ("(“we,~~" "us"~~” “us” or ~~"our"~~“our”) operate specialty department stores primarily in small and mid-sized towns and communities. We provide customers a welcoming and comfortable shopping experience in our stores and through our direct-to-consumer business. Our merchandise assortment is a well-edited selection of moderately priced brand name and private label apparel, accessories, cosmetics, footwear and home goods. As of January ~~31, 2015,~~28, 2017, we operated ~~854~~798 specialty department stores in 4038 states under the BEALLS, ~~GOODY'S,~~GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and a direct-to-consumer business.

On March 7, 2014, we divested Steele's, an off-price concept that we launched in November 2011, in order to focus solely on our core specialty department store business. Accordingly, the results of operations of Steele's and loss on the sale are reflected in discontinued operations for all periods presented.

Our History

Stage Stores, Inc. was formed in 1988 when the management of Palais Royal, together with several venture capital firms, acquired the family-owned Bealls and Palais Royal chains, both of which were originally founded in the 1920s. At the time of the acquisition, Palais Royal operated primarily larger stores, located in and around the Houston metropolitan area, while Bealls operated primarily smaller stores, principally located in rural Texas towns.

Our Market and Target Customer

Our distinct store environment and well-edited ~~offerings of~~assortments offer name brand, ~~and~~ trend-right ~~assortments attract a wide demographic. Our merchandise combination of~~ apparel, accessories, cosmetics, footwear and home ~~allows us participate in a number of market segments.~~goods. While our broad ~~assortment appeals to~~assortments attract a wide ~~array of people of varying ages and diverse backgrounds,~~demographic, our primary target customers are style and value savvy women over the age of 35 who are married, employed full time and have an average household income of $55,000. Our customer research reveals our target customer loves ~~to shop for fun,~~shopping and enjoys a shopping experience that brings her style, value and inspiration where she lives.

Competition

The retail industry is highly competitive, with competition coming from both brick-and-mortar stores as well as e-commerce. We view our ability to provide our customers the options of shopping both in store and ~~we compete~~online, particularly in ~~our stores and in our e-commerce business. However,~~underserved markets, as a result of our small and mid-sized market focus, our stores generally face less competition for our brand name merchandise since branded merchandise is typically available only in regional malls, which are often located more than 30 miles away from our nearest store. Due to minimal branded merchandise overlap, we generally do not directly compete for branded merchandise sales with national discounters such as Wal-Mart. In small and mid-sized markets where we do compete for brand name merchandise sales, competition generally comes fromcompetitive advantage. Additional competitive advantages over local retailers and small regional chains in the small to mid-sized communities include (i) economies of scale (ii) strong vendor relationships (iii) a widely used private label credit card and ~~to a lesser extent, national department stores.~~(iv) extensive experience in small and mid-size markets. In ~~the more competitive~~larger markets where we compete against other national department store chains, we distinguish ourselves by striving to offer ~~consumers~~ a high level of customer service and the advantage of generally being in neighborhood locations with convenient parking and easy access. We believe we have a competitive advantage over local retailers and small regional chains due to our (i) broader selection of brand name merchandise, (ii) distinctive retail concept, (iii) economies of scale, (iv) strong vendor relationships and (v) private label credit card program. We also believe we have a competitive advantage in small and mid-sized markets over national department stores due to our experience with smaller markets.

~~Table of Contents~~

Our Competitive Strengths

We believe the following strengths differentiate us from our competitors and are key drivers of our success:

Unique Real Estate Positioning and ~~Powerful~~Strong Store Economics. Our stores are predominantly located in small towns and communities with populations of less than ~~150,000.~~150,000 people. We predominantly lease our locations and are generally secondary users of space, allowing us to secure advantageous occupancy terms. Our average store isof 18,000 square feet ~~which is a small-format footprint for a specialty department store concept. We believe this~~ creates an opportunity to offer a selection that feels comprehensive and curated in an inviting environment.

Trend-Right, Brand Name Merchandise Delivered at a Compelling Value. Our stores and direct-to-consumer business carry a broad selection of trend-right, brand name apparel, accessories, cosmetics, footwear and home goods for the entire family. Our buyers identify and purchase nationally recognized, quality brands and trend-right styles our customers find compelling from respected brands such as ~~Levi Strauss, Nike,~~Adidas, Calvin Klein, Carters, Chaps, ~~Izod,~~Clinique, Dockers, ~~Carters, Jockey,~~ Estee Lauder, ~~Clinique,~~Izod, Levi’s, Nautica, ~~Skechers~~Nike, Nine West and ~~DKNY.~~Skechers. Our value proposition for moderately priced, brand name merchandise includes ~~routine~~ discount and promotional offers. We believe our use of discount and promotional offers generates customer excitement and drives loyalty and repeat shopping.

Experienced Management Team with a Disciplined Operating Philosophy. Our senior management team has extensive experience across a wide range of disciplines in the retail industry, including merchandising, marketing, store operations, human resources, information systems and finance. Our management team has built a solid operating foundation based on sound retail principles and is focused on taking care of our customers ~~to provide~~and providing great merchandise and a great experience.

Stores

Store Openings and Closures. ~~During 2014, we opened 18~~We did not open any new stores during 2016 and ~~closed 12 stores. In 2015, we~~do not plan to ~~slow our new store growth as we embark on a multi-year initiative to increase investments in our direct-to-consumer business and existing stores. We anticipate opening 2~~open new stores in ~~2015.~~2017. As part of a strategic evaluation of our store portfolio in 2015, we announced a multi-year plan to close stores that we believe do not have the potential to meet our sales productivity and profitability standards. Since then, we have closed 60 stores, including 37 stores during 2016. We expect to close approximately 100 stores in total through 2019, with 15 to 20 store closures anticipated for 2017. We continually review the profitability of each store and ~~look to close~~will consider closing a store if the expected store performance does not meet our financial hurdle rates. ~~We expect~~The closure of these stores is expected to ~~close 10-20 stores, where lease terms permit, in 2015.~~improve our ability to effectively allocate capital, deliver higher sales productivity and be accretive to earnings.

Expansion, Relocation and Remodeling. During ~~2014,~~2016, we ~~expanded 13 stores~~completed 86 store remodels, relocations and ~~relocated 7 stores. In~~expansions. Since we began our store remodel initiative in 2015, we ~~plan to increase~~have updated over 200 stores representing approximately 45% of our sales base. We believe that our investment in ~~the expansion, relocation and remodeling of our existing stores. We believe that remodeling~~these stores improves the store environment and helps us create an inviting and differentiated shopping experience. Our ~~remodeling projects~~store remodels are designed to create a bright, fun and comfortable ~~store experience~~environment and ~~may~~ include upgrades ranging from ~~improving~~improved lighting, flooring, paint, fixtures, fitting rooms, visual merchandising and signage, to more extensive expansion projects. ~~Relocations are intended to improve the store's location and to help it capitalize on incremental sales productivity potential.~~

In 2014, we undertook an initiative to measure selling square footage for each store. Historically, selling square footage for our stores was based on a percentage of gross square footage. The changes as a result of that initiative are included in the beginning balance in the following tables.

Store count and selling square footage by nameplate are as follows:


	Number of Stores				Selling Square Footage (in thousands)					Number of Stores				Selling Square Footage (in thousands)
	February 1, 2014	2014 Activity Net Changes		January 31, 2015	February 1, 2014	2014 Activity Net Changes		January 31, 2015		January 30, 2016	2016 Activity Net Changes^(a)		January 28, 2017	January 30, 2016	2016 Activity Net Changes		January 28, 2017
Bealls	215	4		219	4,332	71		4,403		205	(1	)	204	4,119	43		4,162
Goody's	268	(2	)	266	4,238	(13	)	4,225		250	(26	)	224	3,949	(480	)	3,469
Palais Royal	53	—		53	1,135	—		1,135		52	(3	)	49	1,110	(47	)	1,063
Peebles	191	6		197	3,497	67		3,564		193	(6	)	187	3,523	(94	)	3,429
Stage	121	(2	)	119	2,111	(29	)	2,082		134	—		134	2,429	36		2,465
Total										834	(36	)	798	15,130	(542	)	14,588
	848	6		854	15,313	96		15,409
^(a)One store, which had been temporarily closed and was not included in the store count as of January 30, 2016, was relocated and reopened in 2016.									^(a)One store, which had been temporarily closed and was not included in the store count as of January 30, 2016, was relocated and reopened in 2016.

~~Table of Contents~~

Utilizing a ten-mile radius from each store, approximately ~~58%~~65% of our stores are located in communities with populations below 50,000 people, while an additional ~~26%~~19% of our stores are located in communities with populations between 50,000 and 150,000 people. The remaining 16% of our stores are located in higher-density markets with populations greater than 150,000 people, such as Houston, San Antonio and Lubbock, Texas. The store count and selling square footage by market area population are as follows:


	Number of Stores				Selling Square Footage (in thousands)					Number of Stores				Selling Square Footage (in thousands)
	February 1, 2014	2014 Activity Net Changes		January 31, 2015	February 1, 2014	2014 Activity Net Changes		January 31, 2015
Population										January 30, 2016	2016 Activity Net Changes^(a)		January 28, 2017	January 30, 2016	2016 Activity Net Changes		January 28, 2017
Less than 50,000	491	5		496	7,793	100		7,893		538	(15	)	523	8,717	(165	)	8,552
50,000 to 150,000	217	3		220	4,303	51		4,354		167	(18	)	149	3,412	(310	)	3,102
Greater than 150,000	140	(2	)	138	3,217	(55	)	3,162		129	(3	)	126	3,001	(67	)	2,934
Total										834	(36	)	798	15,130	(542	)	14,588
	848	6		854	15,313	96		15,409
^(a)One store, which had been temporarily closed and was not included in the store count as of January 30, 2016, was relocated and reopened in 2016.									^(a)One store, which had been temporarily closed and was not included in the store count as of January 30, 2016, was relocated and reopened in 2016.

In our ongoing effort to enhance the customer experience, we are focused on providing customers with a seamless experience across our channels. Our direct-to-consumer business, which consists of our e-commerce website and Send ~~program. Since launching~~program, enables us to reach customers with additional convenience and assortment of merchandise, acquire customers beyond our local markets, and further build our brand. Our e-commerce website, which we launched in 2010, ~~we have made growing our direct-to-consumer business a high priority. Our e-commerce~~

As our omni-channel strategy continues to mature, it is increasingly difficult to distinguish between store sales and direct-to-consumer sales. Below are few examples of how our stores and direct-to-consumer business ~~enables~~intersect:

Providing our customers the opportunity to engage with us ~~to reach customers outside~~through multiple channels is part of ~~store operating hours, acquire customers in all states and further~~a cohesive business strategy that helps us build our ~~brand. We believe there is significant potential to expand~~brand loyalty. Customers that shop with us both online and in stores spend, on average, 3 times more than customers that shop only in our ~~direct-to-consumer business over time.~~stores.

We offer a well-edited selection of moderately priced, branded merchandise within distinct merchandise categories ~~such as women's, men's~~of women’s, men’s and ~~children's~~children’s apparel, ~~as well as~~ accessories, cosmetics, footwear and home goods. Our direct-to-consumer business allows us to extend the breadth of our assortments and offer additional products.

The following table sets forth the distribution of net sales among our various merchandise categories:

^(a)~~Women's includes misses sportswear, junior sportswear, dresses, special sizes, intimates, outerwear and swim.~~

^(b) ~~Men's includes men's and young men's.~~

Merchandise selections reflect current styles and trends and merchandise mix may also vary from store to store to accommodate differing demographic, regional and ~~climatic~~climate characteristics. Our buying and planning team ~~use~~uses technology tools such as size pack optimization and store level markdown ~~optimization~~optimization. These tools allow us to ~~localize assortments.~~better fulfill customer needs by tailoring size assortments by store and by being more targeted in how we markdown merchandise by climate and store.

Approximately ~~87%~~82% of sales consist of nationally recognized brands such as ~~Levi Strauss, Nike,~~Adidas, Calvin Klein, Carters, Chaps, Clinique, Dockers, Estee Lauder, G by Guess, Izod, ~~Dockers, Carters,~~Jessica Simpson, Levi’s, Nike, Nine West ~~Estee Lauder, Clinique, Nautica,~~and Skechers, ~~and DKNY,~~ while the remaining ~~13%~~18% of sales ~~consist of our~~are private label merchandise.

Our private label portfolio brands are developed and sourced through agreements with third party vendors. We believe our private label and exclusive brands offer a compelling mix of style, quality and ~~excellent~~ value. We continue to refine the positioning of our private brands and we see them as an avenue for growth.

~~We are also focused on growing our cosmetics business. In 2014, we installed Estee Lauder counters in 75 stores and Clinique counters in 76 stores.~~

Merchandise Distribution

We currently distribute all merchandise to our stores through distribution centers located in Jacksonville, Texas, South Hill, Virginia and Jeffersonville, Ohio. Incoming merchandise received at the distribution centers is inspected for quality control purposes.

Integrated merchandising and warehouse management systems support all corporate and distribution center locations. All of our distribution centers are equipped with modern sortation equipment which enables us to meet specific store merchandise assortment needs. The ~~configurations of the distribution centers permit scheduled shipments to stores, with the~~ majority of stores ~~receiving~~receive merchandise within three days of shipment from the distribution centers. We utilize third party contract carriers to deliver merchandise from the distribution centers to our stores.

Direct-to-consumer orders are predominantly filled ~~both~~ from our distribution ~~centers~~center in Jacksonville, Texas and to a lesser extent from our ~~stores.~~

~~Marketing~~Jeffersonville, Ohio distribution center, select stores and directly from our vendors.

We use a multi-media advertising approach, including broadcast media, digital media, mobile media, local newspaper inserts and direct mail. In addition, we leverage our private label credit card to create strong customer loyalty through continuous one-on-one communication.

Our marketing strategy is designed to establish and reward brand ~~loyalty and support~~loyalty. The strategy supports each ~~store's~~store’s position as the destination for desirable styles and nationally recognized brands at an attractive value in a comfortable and welcoming environment. Our marketing strategy leverages (i) consumer insight from brand and customer research, (ii) identified customer purchase history ~~to plan and execute targeted omni-channel marketing to our customers~~ and (iii) emerging technology and trends in retail marketing.

~~Maintaining~~We use a ~~connection~~multi-media advertising approach, including broadcast media, digital media, mobile media, local newspaper inserts and direct mail. In addition, we leverage our private label credit card to create strong customer loyalty through compelling offers, dedicated events for cardholders, and updates on the ~~communities~~latest deliveries in our stores.

We consider our private label credit card program and Style Circle Rewards^®, our tender-neutral loyalty program, to be vital components of our business because these loyalty programs (i) enhance customer loyalty, (ii) allow us to identify and regularly contact our best customers and (iii) create a comprehensive database that enables us to implement targeted and personalized marketing messages. Private label credit card purchases represented 47%, 44% and 40% of our sales in 2016, 2015 and 2014, respectively. In the third quarter of 2016, we ~~serve is important~~ launched Style Circle Rewards^®to encourage and reward customer loyalty for both private label credit cardholders and non-cardholders. These loyalty programs allow us to better understand and ~~we have started a locally based giving campaign called 30 Days~~respond to our customers’ shopping habits and are powerful tools to drive higher transaction value and frequency of ~~Giving under our Community Counts program. In 2014, through our Community Counts program, we helped raise over $3.0 million for the communities we serve.~~visits.

Brand image is an important part of our marketing program. Our principal trademarks, including the BEALLS, ~~GOODY'S,~~GOODY’S, PALAIS ROYAL, PEEBLES and STAGE trademarks, have been registered with the U.S. Patent and Trademark Office. We have also registered trademarks used in connection with our private label merchandise. We regard our trademarks and their protection as important to our success.

~~Private Label Credit Card Program.~~ We ~~consider our private label credit card program to be~~maintain a vital component of our business because it (i) enhances customer loyalty, (ii) allows us to identify and regularly contact our best customers and (iii) creates a comprehensive database that enables us to implement targeted and personalized marketing messages. Our Premier Rewards customer loyalty program provides significantly enhanced benefits and incentives for our private label credit card holders. Customers earn reward certificates redeemable for merchandise based on purchases, free shipping on direct-to-consumer purchases, special promotional discounts and invitations to private sales. The percentage of sales that are paid for using the private label credit card is our "penetration rate." The penetration rate for our private label credit card was 40% in 2014, an increase of more than 400 basis points comparedconnection to the ~~prior year.~~communities we serve and operate a locally based giving campaign called 30 Days of Giving under our Community Counts program. In ~~2013~~2016, through our Community Counts program and ~~2012,~~other efforts like our Bears that Care program, we helped raise approximately $2.1 million for the ~~penetration rate was 36% and 33%, respectively.~~communities we serve.

We strive to provide exceptional customer service through conveniently located stores staffed with well-trained and motivated sales associates. In order to ensure consistency of execution, each sales associate is evaluated based on the attainment of specific customer service standards, such as offering a friendly greeting, providing prompt assistance, helping open private label credit card accounts, thanking customers and inviting return visits. We also conduct customer satisfaction surveys to measure and monitor attainment of customer service expectations. The results of customer surveys are used to provide feedback to reinforce and improve customer service. To further reinforce our focus on customer service, we have various programs in place to recognize our sales associates for providing outstanding customer service.

We support our business by using multiple, highly integrated systems in areas such as merchandising, store operations, distribution, sales promotion, personnel management, store design and accounting. Our core merchandising systems assist in planning, ordering, allocating and replenishing merchandise assortments for each store, based on specific characteristics and recent sales trends. Our ~~price change management system allows us to identify and mark down slow moving merchandise. Our~~ replenishment/fulfillment system allows us to maintain planned levels of in-stock positions in basic items such as jeans and underwear. In addition, a fully integrated warehouse management system is in place in all three distribution centers.

We have a store level markdown optimization tool, which is focused on pricing items on a style-by-style basis at the appropriate price, based on inventory levels and sales history ~~in order~~ to maximize revenue and profitability. Our assortment planning system allows us to create customer-centric assortments aligned to sales strategies. The system also facilitates cleaner seasonal transitions and fresher merchandise in stores. We continue to expand the utilization and effectiveness of our merchandise planning system in order to maximize the generation of sales and gross margin. In ~~2014,~~2016, we implemented ~~markdown optimization at the store level~~new systems to support our Style Circle Rewards® loyalty program and ~~continued~~omni-channel order management, and we introduced buy online, ship to ~~make progress on size pack optimization to better tailor assortments at the store level.~~store.

We utilize a point-of-sale ~~("POS"~~(“POS”) platform with bar code scanning, electronic credit authorization, instant credit, a returns database and gift card processing in all our stores. The POS platform allows us to capture customer specific sales data for use in our merchandising, marketing and loss prevention systems, while ~~quickly~~ servicing our customers. The POS platform also manages coupon and deal-based pricing, which streamlines the checkout process and improves store associate adherence to promotional markdown policies.

At January ~~31, 2015,~~28, 2017, we employed approximately ~~14,300~~12,400 hourly and salaried employees. Employee levels ~~will~~ vary during the year as we traditionally hire additional sales associates and increase the hours of part-time sales associates during peak seasonal selling periods. We consider our relationship with our employees to be good, and there are no collective bargaining agreements in effect with respect to any of our employees.

Our business is seasonal and sales are traditionally lower during the first three quarters of the fiscal year (February through October) and higher during the last quarter of the fiscal year (November through January). The fourth quarter usually accounts for approximately ~~30%~~32% of our annual sales, with each of the other quarters accounting for approximately 22% to 24%. Working capital requirements fluctuate during the year as well and generally reach their highest levels during the third and fourth quarters.

~~Table of Contents~~

Available Information

We make available, free of charge, through the ~~"Investor Relations"~~“Investor Relations” section of our website (www.stagestoresinc.com)

under the ~~"SEC Filings"~~“Financial Reports” caption, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended ("(“Exchange ~~Act"~~Act”) as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission ~~("SEC"~~(“SEC”). In this Form 10-K, we incorporate by reference certain information from parts of our Proxy Statement for our ~~2015~~2017 Annual Meeting of Shareholders ("(“Proxy ~~Statement"~~Statement”).

Also in the ~~"Investor Relations"~~“Investor Relations” section of our website (www.stagestoresinc.com) under the ~~"Corporate Governance"~~“Corporate Governance” and ~~"SEC Filings"~~“Financial Reports” captions, the following information relating to our corporate governance may be found: Corporate Governance Guidelines; charters of our Board of ~~Directors'~~Directors’ Audit, Compensation, and Corporate Governance and Nominating Committees; Code of Ethics and Business Conduct; Code of Ethics for Senior Officers; Chief Executive Officer and Chief Financial Officer certifications related to our SEC filings; and transactions in our securities by our directors and executive officers. The Code of Ethics and Business Conduct applies to all of our directors and employees. The Code of Ethics for Senior Officers applies to our Chief Executive Officer, Chief Financial Officer, Controller and other individuals performing similar functions, and contains provisions specifically applicable to the individuals serving in those positions. We intend to post amendments to and waivers from, if any, our Code of Ethics and Business Conduct (to the extent applicable to our directors and executive officers) and our Code of Ethics for Senior Officers in the ~~"Investor Relations"~~“Investor Relations” section of our website (www.stagestoresinc.com) under the ~~"Corporate Governance"~~“Corporate Governance” caption. We will provide any of the foregoing information without charge upon written request to our Secretary. The contents of our websites are not part of this report.

ITEM 1A. RISK FACTORS

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"~~(“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 may cause actual results to differ materially from those discussed in the statements. We wish to take advantage of the ~~"safe harbor"~~“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,"~~“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 ~~may~~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 (as defined in ~~"Liquidity~~“Liquidity and Capital ~~Resources"~~Resources”), 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'~~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 this 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.

~~Table of Contents~~

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 ~~may~~could materially affect our business, financial condition, results of operations or liquidity.

Readers should carefully review this Form 10-K in its entirety, including, but not limited to our financial statements and the accompanying notes, and the risks and uncertainties described in this Item 1A. Readers should consider 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. Forward-looking statements contained in this Form 10-K are made as of the date of this Form 10-K. 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.

Our ability to achieve the results contemplated by forward-looking statements is subject to a number of factors, any one, or a combination, of which ~~may~~could materially affect our business, financial condition, results of operations, or liquidity. Described below are certain risk factors that management believes are applicable to our business and the industry in which we operate. There may also be additional risks that are presently immaterial or unknown.

If we are unable to successfully execute our strategies, our operating performance may be significantly impacted. There is a risk that we will be unable to meet ~~or exceed~~ our operating performance targets and goals in the future if our strategies and initiatives are unsuccessful. Our ability to develop and execute our strategic plan and to execute the business activities associated with our strategic and operating plans, may impact our ability to meet our operating performance targets.

An economic downturn or decline in consumer confidence may negatively impact our business and financial condition. Our results of operations are sensitive to changes in general economic and political conditions that impact consumer discretionary spending, such as employment levels, taxes, energy and gasoline prices and other factors influencing consumer confidence. We have extensive operations in the South Central, Southeastern and Mid-Atlantic states. Many stores are located in small towns and rural environments that are substantially dependent upon the local economy. We also have concentrations of stores in areas where the local economy is heavily dependent on the oil and gas industry, particularly in portions of Texas, Louisiana, Oklahoma, and New Mexico. A decline in crude oil prices may negatively impact employment in those communities, resulting in reduced consumer confidence and discretionary spending. Additionally, approximately 3% of our stores contributing approximately 6% of our 2016 sales are located in cities that either border Mexico or are in close proximity to Mexico. A devaluation of the Mexican peso will reduce the purchasing power of those customers who are citizens of Mexico. In such an event, revenues attributable to these stores could be reduced. In 2015 and 2016, we experienced pressure on our business in areas that are heavily dependent on the oil industry and near the Mexican border. If those pressures continue or there is an additional economic downturn or decline in consumer confidence, particularly in the South Central, Southeastern and Mid-Atlantic states and any state from which we derive a significant portion of our net sales (such as Texas or Louisiana), our business, financial condition and cash flows will be negatively impacted and such impact may be material.

Unusual weather patterns or natural disasters may negatively impact our financial condition. Ourbusiness depends, in part, on normal weather patterns in our markets. We are susceptible to unseasonable and severe weather conditions, including natural disasters, such as hurricanes and tornadoes. Any unusual or severe weather, especially in states such as Texas and Louisiana, may have a material and adverse impact on our business, financial condition and cash flows. In addition, our business, financial condition and cash flow may be adversely affected if the businesses of our key vendors or their merchandise manufacturers, shippers, carriers and other merchandise transportation service providers, including those outside of the United States, are disrupted due to severe weather, such as, but not limited to, hurricanes, typhoons, tornadoes, tsunamis or floods.

Our failure to anticipate and respond to changing customer preferences in a timely manner may adversely affect our operations. Our success depends, in part, upon our ability to anticipate and respond to changing consumer preferences and fashion trends in a timely manner. We attempt to stay abreast of emerging lifestyles and consumer preferences affecting our merchandise. However, any sustained failure on our part to identify and respond to such trends may have a material and adverse effect on our business, financial condition and cash flows.

Failure to successfully operate our e-commerce website or fulfill customer expectations may adversely impact our business and sales. Our e-commerce platform provides another channel to generate sales. We believe that ~~the~~our e-commerce website will drive incremental sales by providing existing customers another opportunity to shop with us and ~~also~~ allowing us to reach new customers. If we do not successfully meet the challenges of operating an e-commerce website or fulfilling customer expectations, our business and sales may be adversely affected.

We face ~~the risk of~~ significant competition in the retail apparel industry, which may ~~result in the loss of customers and~~ adversely affect ~~revenues~~our sales and profitability. The retail apparel business is highly competitive. ~~Although competition varies widely from market~~We compete with local, regional, national and online retailers, including department, specialty and discount stores, direct-to-consumer businesses and other forms of retail commerce. The Internet and evolving technologies in retail have led to ~~market, we face the risk of~~ increased competition ~~particularly~~as there are fewer barriers to entry and consumers are able to quickly and conveniently comparison shop. We compete on many factors, such as, merchandise assortment, advertising, price, quality, convenience, customers’ shopping experience, store environment, service, loyalty programs and credit availability. Unanticipated changes in ~~our more highly populated markets from national, regional~~the pricing and ~~local department and specialty stores. Some~~other practices of our competitors ~~are considerably larger than us~~may create downward pressure on prices and have substantially greater resources. Although we offer a unique product mix and brands that are not available at certain other retailers, including regional and national department stores, there is no assurance thatlower demand for our existing or new competitors will not carry similar branded merchandise in the future. This may have a material and adverse effect on our business, financial condition and cash flows. In addition to traditional store-based retailers, we also face e-commerce competition,products, which may ~~materially affect~~adversely impact our ~~revenues~~sales and profitability.

~~An economic downturn or decline in consumer confidence may negatively impact our business and financial condition~~. Our results of operations are sensitive to changes in general economic conditions that impact consumer discretionary spending, such as employment levels, taxes, energy and gasoline prices and other factors influencing consumer confidence. We have extensive operations in the South Central, Southeastern and Mid-Atlantic states. In addition, many stores are located in small towns and rural environments that are substantially dependent upon the local economy. If there is an economic downturn or decline in consumer confidence, particularly in the South Central, Southeastern and Mid-Atlantic states and any state from which we derive a significant portion of our net sales (such as Texas or Louisiana), our business, financial condition and cash flows will be negatively impacted and such impact may be material.

~~Table of Contents~~

There can be no assurance that our liquidity will not be affected by changes in economic conditions. ~~Recent economic conditions have not had, nor do we anticipate that current economic conditions will have, a significant impact on our liquidity.~~ Due to our ~~significant~~ operating cash flow and availability under ~~our~~the Revolving Credit Facility, we continue to believe that we have the ability to meet our financing needs for the foreseeable future. However, there can be no assurance that our liquidity will not be materially and adversely affected by changes in economic conditions.

Failure to obtain merchandise product on normal trade terms and/or our inability to pass on any price increases related to our merchandise may adversely impact our business, financial condition and cash flows. We are highly dependent on obtaining merchandise product on normal trade terms. Failure to meet our performance objectives may cause key vendors and factors to become more restrictive in granting trade credit. The tightening of credit, such as a reduction in our lines of credit or payment terms from the vendor or factor community, may have a material adverse impact on our business, financial condition and cash flows. We are also highly dependent on obtaining merchandise at competitive and predictable prices. In the event we experience rising prices related to our merchandise, whether due to cost of materials, inflation, transportation costs, or otherwise, and are unable to pass on those rising prices to our customers, our business, financial condition and cash flows may be adversely and materially affected.

Risks associated with our vendors from whom our products are sourced may have a material adverse effect on our business and financial condition. Our merchandise is sourced from a variety of domestic and international vendors. All of our vendors must comply with applicable laws, including our required standards of conduct. Political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade, the ability to access suitable merchandise on acceptable terms and the financial viability of our vendors are beyond our control and may adversely impact our performance.

Risks associated with our carriers, shippers and other providers of merchandise transportation services may have a material adverse effect on our business and financial condition. Our vendors rely on shippers, carriers and other merchandise transportation service providers (collectively ~~"Transportation Providers"~~“Transportation Providers”) to deliver merchandise from their manufacturers, both in the United States and abroad, to the ~~vendors'~~vendors’ distribution centers in the United States. Transportation Providers are also responsible for transporting merchandise from their ~~vendors'~~vendors’ distribution centers to our distribution centers. We also rely on Transportation Providers to transport merchandise from our distribution centers to our stores and to our customers in the case of ~~e-commerce~~direct-to-consumer sales. However, if work slowdowns, stoppages, weather or other disruptions affect the transportation of merchandise between the vendors and their manufacturers, especially those manufacturers outside the United States, between the vendors and us, or between us and our e-commerce customers, our business, financial condition and cash flows may be adversely affected.

~~Unusual weather patterns or natural disasters, whether due to climate change or otherwise, may negatively impact our financial condition.~~ ~~Our~~business depends, in part, on normal weather patterns in our markets. We are susceptible to unseasonable and severe weather conditions, including natural disasters, such as hurricanes and tornadoes. Any unusual or severe weather, especially in states such as Texas and Louisiana, whether due to climate change or otherwise, may have a material and adverse impact on our business, financial condition and cash flows. In addition, our business, financial condition and cash flow may be adversely affected if the businesses of our key vendors and their merchandise manufacturers, shippers, carriers and other merchandise transportation service providers, including those outside of the United States, are disrupted due to severe weather, such as, but not limited to, hurricanes, typhoons, tornadoes, tsunamis or floods, whether due to climate change or otherwise.

A catastrophic event adversely affecting any of our buying, distribution or other corporate facilities may result in reduced revenues and loss of customers. Our buying, distribution and other corporate operations are in highly centralized locations. Our operations may be materially and adversely affected if a catastrophic event (such as, but not limited to, fire, hurricanes, tornadoes or floods) impacts the use of these facilities. While we have ~~developed~~ contingency plans that would be implemented in the event of a catastrophic event, there are no assurances that we would be successful in obtaining alternative servicing facilities in a timely manner in the event of such a catastrophe.

War, acts of terrorism, Mexican border violence, public health issues and natural disasters may create uncertainty and may result in reduced revenues. We cannot predict, with any degree of certainty, what effect, if any, war, acts of terrorism, Mexican border violence, public health issues and natural disasters, if any, will have on us, our operations, the other risk factors discussed herein and the forward-looking statements we make in this Form 10-K. However, the consequences of these events may have a material adverse effect on our business, financial condition and cash flows.

~~Table of Contents~~

A disruption of our information technology systems may have a material adverse impact on our business and financial condition. We are heavily dependent on our information technology systems for ~~day~~day-to-day business operations, including sales, warehousing, distribution, purchasing, inventory control, merchandise planning and replenishment, and financial systems. Certain of our information technology support functions are performed by third-parties in overseas locations. While we believe that we are diligent in selecting the vendors that assist us in maintaining the reliability and integrity of our information technology systems, failure by any of these third-parties to ~~day business operations.~~implement and/or manage our information systems and infrastructure effectively and securely could result in future disruptions, service outages, service failures or unauthorized intrusions. Despite our precautionary efforts, our information technology systems are vulnerable to damage or interruption from, among other things, natural or man-made disasters, technical malfunctions, inadequate systems capacity, power outages, computer viruses and security breaches, which may require significant investment to fix or replace, and we may suffer loss of critical data and interruptions or delays to our operations in the interim. In addition, as part of our normal course of business, we collect, process and retain sensitive and confidential customer information. ~~Today's information technology risks are largely external and their consequences may affect us.~~ Potential risks include, but are not limited to, the following: (i) an intrusion by a hacker, (ii) the introduction of malware (virus, Trojan horse, spyware), (iii) hardware failure, (iv) outages due to software defects and (v) human error. Although we run anti-virus and anti-spyware software and take other steps to ensure that our information technology systems will not be disabled or otherwise disrupted, there are no assurances that disruptions will not occur. The consequences of a disruption, depending on the severity, may have a material adverse effect on our business and financial condition and may expose us to civil, regulatory and industry actions and possible judgments, fees and fines.

A security breach that results in unauthorized disclosure of customer, employee, vendor or our ~~employee or customer~~company information may adversely impact our business, reputation and financial condition. ~~The~~In the standard course of business, we receive, process and store information about our customers, employees, vendors and our business, some of which is entrusted to third-party service providers and vendors. We also work with third-party service providers and vendors that provide technology, systems and services that we use in connection with the receipt, storage and transmission of this information. Hardware, software or applications obtained from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise our information security. We rely on commercially available systems, software, tools (including encryption technology) and monitoring to provide security and oversight for processing, transmission, storage and the protection of ~~customer, employee,~~confidential information. Despite the security measures we have in place, our facilities and ~~company~~systems (and those of our vendors and third party service providers) may be vulnerable to security breaches, acts of vandalism and theft, computer viruses, misplaced or lost data, ~~is critical~~programming and/or human errors, or other similar events. Our employees, contractors, vendors or third party service providers may attempt to ~~us.~~circumvent our security measures in order to misappropriate such information, and may purposefully or inadvertently cause a breach involving such information. Additionally, unauthorized parties may attempt to gain access to our systems or facilities through fraud, trickery, or other means of deceit. We have programs in place to detect, contain and respond to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, we may be unable to anticipate these techniques or implement adequate preventive measures to safeguard against all data security breaches or misuses of data. Any security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer, employee or company information may severely damage our reputation, cause us to incur significant remediation costs,expose us to the risks of legal proceedings (including fines or other regulatory sanctions), disrupt our operations, attract a substantial amount of negative media attention, damage our customer relationships, and otherwise have a material adverse impact on our business and financial condition. While we have taken significant steps to protect confidential information, there is no assurance that advances in computer capabilities, new discoveries in the field of cryptography, or other developments will prevent the compromise of customer transaction processing capabilities and personal data. If any such compromise of our information security were to occur, it may have a material adverse effect on our reputation, business, operating results, financial condition and cash flows.

We are subject to payment-related risks that may increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business. We accept payments using a variety of methods, including cash, checks, credit and debit cards, and gift cards, and we may offer new payment options over time. Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers. These requirements may change over time or be reinterpreted, making compliance more difficult or costly. We rely on third parties to provide payment processing services and pay interchange and other fees, which may increase over time and raise our operating costs. On October 1, 2015, the payment cards industry began shifting liability for certain debit and credit card transactions to retailers who do not accept Europay, MasterCard and Visa (“EMV”) chip technology transactions. We have not yet implemented EMV chip technology. Implementation of the EMV chip technology and receipt of final certification is subject to the time availability of third-party service providers and may require upgrades to our systems and hardware. Further, we may experience a decrease in transaction volume if we cannot process transactions for cardholders whose card issuer has migrated entirely from magnetic strip to EMV chip enabled cards. Until we are able to fully implement and certify the EMV chip technology in our stores, we may be liable for chargebacks related to counterfeit transactions generated through EMV chip enabled cards, which could negatively impact our operational results, financial position and cash flows.

Our failure to attract, develop and retain qualified employees may ~~deteriorate~~negatively impact the results of our operations. We ~~believe that our competitive advantage is providing~~strive to have well-trained and motivated sales associates ~~in order to~~ provide customers with exceptional ~~customer~~ service. Our success depends in part upon our ability to attract, develop and retain a sufficient number of qualified employees, including store, service and administrative personnel. Competition for key personnel in the retail industry is intense and our future success will depend on our ability to recruit, train, and retain our senior executives and other qualified personnel.

Changes in the regulatory or administrative landscape could adversely affect our financial condition and results of operations. Laws and regulations ~~may adversely impact our business, financial condition~~at the local, state, federal, and ~~cash flows.~~ ~~We, like other businesses, are subject to various federal, state~~international levels frequently change, and ~~local government laws and regulations including, but not limited to, tax laws. These may change periodically in response to economic or political conditions. We~~the ultimate cost of compliance cannot be precisely estimated. In addition, we cannot predict ~~whether existing laws or regulations, as currently interpreted or as reinterpreted~~the impact that may result from changes in the ~~future,~~regulatory or ~~future laws~~administrative landscape. Any changes in regulations, the imposition of additional regulations, or the enactment of any new or more stringent legislation that impacts employment and ~~regulations, may~~labor, trade, product safety, transportation and logistics, health care, tax, privacy, operations, or environmental issues, among others, could have ~~a material and~~an adverse impact on our ~~operations,~~ financial condition and ~~cash flows.~~results of operations.

Our business may be materially and adversely affected by changes to fiscal and tax policies. The new U.S. presidential administration has called for substantial change to fiscal tax policies, which may include comprehensive tax reform. We cannot predict the impact, if any, of these changes to our business. It is likely that some policies adopted by the new administration will benefit us and others will negatively affect us. Until we know what changes are enacted, we will not know whether in total we will benefit from, or be negatively affected by, the changes.

We may be subject to periodic litigation and regulatory proceedings which may adversely affect our business and financial performance. From time to time, we are involved in lawsuits and regulatory proceedings. Due to the inherent uncertainties of such matters, we may not be able to accurately determine the impact on us of any future adverse outcome of such matters. The ultimate resolution of these matters may have a material adverse impact on our financial condition, results of operations and liquidity. In addition, regardless of the outcome, these matters may result in substantial cost to us and may require us to devote substantial attention and resources to defend ourselves.

If our trademarks are successfully challenged, the outcome of those disputes may require us to abandon one or more of our trademarks. We regard our trademarks and their protection as important to our success. However, we cannot be sure that any trademark held by us will provide us a competitive advantage or will not be challenged by third parties. Although we intend to vigorously protect our trademarks, the cost of litigation to uphold the validity and prevent infringement of trademarks can be substantial and the outcome of those disputes may require us to abandon one or more of our trademarks.

Our dependence upon cash flows and net earnings generated during the fourth quarter, including the holiday season, may have a disproportionate impact on our results of operations. The seasonal nature of the retail industry causes a heavy dependence on earnings in the fourth quarter. A large fluctuation in economic or weather conditions occurring during the fourth quarter may adversely impact our earnings. In preparation for our peak season, we may carry a significant amount of inventory in advance. If, however, we do not manage inventory appropriately or customer preferences change we may need to increase markdowns or promotional sales to dispose of inventory which will negatively impact our financial results.

~~Table~~Changes in our private label credit card program may adversely affect our sales and/or profitability. Our private label credit card (“PLCC”) program facilitates sales and generates additional revenue under our profit sharing agreement with the unrelated third party which owns the PLCC accounts receivable. PLCC sales represented 47% of ~~Contents~~total sales in 2016, and PLCC customers spend more on average than non-PLCC customers. We receive a share of the net finance charges, late fees, other cardholder fees, write-offs, and operating expenses generated by the program. Changes in credit granting standards maintained by the third party, which may be due to macroeconomic trends, could impact our ability to generate new PLCC accounts. Changes in customer payment patterns could impact profit sharing by impacting fee income, write-offs, and operating expense. If the sales or profit share which we receive from the PLCC decreases due to economic, legal, social, or other factors that we cannot control or predict, our operating results, financial condition and cash flows may be adversely affected.

~~Covenants in our~~The Revolving Credit Facility ~~agreement~~contains covenants that may impose operating restrictions ~~impede or adversely affect~~and limits our ~~ability~~borrowing capacity to ~~pay dividends or repurchase common shares and raise capital through~~ the ~~sale~~value of ~~stock and other securities.~~certain of our assets. ~~Our~~The Revolving Credit Facility agreement contains covenants which, among other things, restrict (i) the amount of additional debt or capital lease obligations we may incur, and (ii) our payment of dividends and repurchase of common stock under certain ~~circumstances and (iii) related party transactions.~~circumstances. A violation of any of these covenants may permit the lenders to restrict our ability to further access loans and letters of credit and may require the immediate repayment of any outstanding loans. Our failure to comply with these covenants may have a material adverse effect on our capital resources, financial condition, results of operations and liquidity. In addition, any material or adverse developments affecting our business may significantly limit our ability to meet our obligations as they become due or to comply with the various covenant requirements contained in ~~our~~the Revolving Credit Facility agreement. In addition, borrowings under the Revolving Credit Facility are limited to the availability under a borrowing base that is determined principally on eligible inventory, and our inventory, cash and cash equivalents are pledged as collateral under the Revolving Credit Facility. In the event of any material decrease in the amount of or appraised value of our inventory, our borrowing capacity would decrease, which may adversely impact our business and liquidity. In the event of a default that is not cured or waived, the lenders’ commitment to extend further credit under the Revolving Credit Facility may be terminated, our outstanding obligations may become immediately due and payable, outstanding letters of credit may be required to be cash collateralized, and remedies may be exercised against the collateral. If we are unable to borrow under the Revolving Credit Facility, we may not have the necessary cash resources for our operations and, if any event of default occurs, there is no assurance that we would have the cash resources available to repay such accelerated obligations, refinance such indebtedness on commercially reasonable terms, or at all, or cash collateralize our letters of credit, which would have a material adverse effect on our business, financial condition, results of operations and liquidity.

The inability or unwillingness of one or more lenders to fund their commitment under ~~our~~the Revolving Credit Facility may have a material adverse impact on our business and financial condition. ~~Our Revolving Credit Facility, which matures on October 6, 2019, is a $350.0 million senior secured revolving credit facility.~~ We use the Revolving Credit Facility to provide financing for working capital, capital expenditures and other general corporate purposes, as well as to support our outstanding letters of credit requirements. The lenders under the Revolving Credit Facility are: Wells Fargo Bank, National Association, JPMorgan Chase Bank, ~~N.A,~~N.A., Regions Bank, ~~and~~ Bank of America, N.A. and SunTrust Bank. Notwithstanding that we may be in full compliance with all covenants contained in the Revolving Credit Facility, the inability or unwillingness of one or more of those lenders to fund their commitment under ~~our~~the Revolving Credit Facility may have a material adverse impact on our business and financial condition.

Unexpected costs may arise from our current insurance program and our financial performance may be affected. Our insurance coverage is subject to deductibles, self-insured retentions, limits of liability and similar provisions that we believe are prudent based on the dispersion of our operations. However, we may incur certain types of losses that we cannot insure or which we believe are not economically reasonable to insure, such as losses due to acts of war, employee and certain other crime and some natural disasters. If we incur these losses and they are material, our business could suffer. Certain material events, including property losses caused by various natural disasters and other types of casualties, may result in sizable losses for the insurance industry and adversely impact the availability of adequate insurance coverage or result in excessive premium increases. To offset negative cost trends in the insurance market, we may elect to self-insure, accept higher deductibles or reduce the amount of coverage in response to these market changes. In addition, we self-insure a portion of expected losses under our ~~workers'~~workers’ compensation, general liability and group health insurance programs. Unanticipated changes in any applicable actuarial assumptions and management estimates underlying our recorded liabilities for these losses, including potential increases in medical and indemnity costs, could result in materially different amounts of expense than expected under these programs, which may have a material adverse effect on our financial condition and results of operations. Although we continue to maintain property insurance for catastrophic events, we are self-insured for losses up to the amount of our deductibles. If we experience a greater number of self-insured losses than we anticipate, our financial performance may be adversely affected.

The price of our common stock as traded on the New York Stock Exchange may be volatile. Our stock price may fluctuate substantially as a result of factors beyond our control, including but not limited to, general economic and stock market conditions, risks relating to our business and industry as discussed above, strategic actions by us or our competitors, variations in our quarterly operating performance, our future sales or purchases of our common stock and investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

~~Table of Contents~~

ITEM 2. PROPERTIES

Our corporate headquarters occupies approximately 195,000 square feet of leased space in Houston, Texas. We own our distribution centers in Jacksonville, Texas and South Hill, Virginia and lease our distribution center in Jeffersonville, Ohio, which have square footages and provide capacity of servicing stores as follows:

Location
Square Footage
(in thousands)
Number of Stores Capable of Servicing
Jacksonville, Texas 437 600
South Hill, Virginia 162 240
Jeffersonville, Ohio 202 310
801 1,150

~~We also lease a 176,000 square foot facility in Jacksonville, Texas to provide capacity expansion for our growing e-commerce business.~~

Our stores are primarily located in strip shopping centers. We own six of our stores and lease the balance. The majority of leases, which are typically for an initial 10-year term and often with two ~~renewals~~renewal options of five years each, provide for aour payment of base rent plus ~~payments for~~ expenses, ~~incurred by the landlord,~~ such as common area maintenance, utilities, taxes and insurance. Certain leases provide for contingent rents that are not measurable at inception. These contingent rents are primarily based on a percentage of sales that are in excess of a predetermined level. Stores range in size from approximately 5,000 to ~~57,000~~67,000 selling square feet, with the average being approximately 18,000 selling square feet. At January ~~31, 2015,~~28, 2017, we operated ~~854~~798 stores, in 4038 states located within 75 regions, as follows:


	Number of Stores		Number of Stores	Number of Stores		Number of Stores
South Central Region		Midwestern Region			Midwestern Region
Arkansas	23	Illinois	6	22	Illinois	6
Louisiana	53	Indiana	24	52	Indiana	24
Oklahoma	38	Iowa	2	35	Iowa	2
Texas	231	Kansas	9	227	Kansas	9
	345	Michigan	15	336	Michigan	15
Mid-Atlantic Region		Minnesota	1
Mid-Atlantic & Northeastern Region					Missouri	14
Delaware	3	Missouri	19	3	Ohio	30
Maryland	8	Ohio	30	6	Wisconsin	4
New Jersey	5	Wisconsin	4	5		104
Pennsylvania	35		110	32	Northwestern & Southwestern Region
Virginia	34	Northeastern Region		35	Arizona	7
West Virginia	11	Connecticut	1	10	Colorado	6
Massachusetts				2	Idaho	3
New Hampshire				2	Nevada	5
New York				20	New Mexico	19
Vermont				4	Oregon	4
	96	Massachusetts	2	119	Utah	3
Southeastern Region		New Hampshire	2		Wyoming	1
Alabama	35	New York	23	28		48
Florida	6	Vermont	4	6
Georgia	38		32	33
Kentucky	34	Northwestern Region		34	Total Stores	798
Mississippi	25	Colorado	6	21
North Carolina	30	Idaho	3	24
South Carolina	21	Oregon	4	19
Tennessee	34	Wyoming	1	26
	223		14	191
Southwestern Region		Total Stores	854
Arizona	7
Nevada	5
New Mexico	19
Utah	3
	34

~~Table of Contents~~

We own our distribution centers in Jacksonville, Texas and South Hill, Virginia and lease our distribution center in Jeffersonville, Ohio, which have square footages and provide capacity of servicing stores as follows:



Location	Square Footage	Number of Stores Capable of Servicing
Jacksonville, Texas	437,000	600
South Hill, Virginia	162,000	240
Jeffersonville, Ohio	202,000	310
	801,000	1,150

We also lease a 176,000 square foot facility in Jacksonville, Texas to provide capacity expansion for our growing e-commerce business.

In addition to the stores and distribution facilities listed above, we lease our corporate office in Houston, Texas.

We consider these principal properties to be suitable and adequate for their intended purpose.

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II


ITEM 5.	MARKET FOR ~~REGISTRANT'S~~REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market and Dividend Information

Our common stock trades on the New York Stock Exchange under the symbol ~~"SSI"~~“SSI”. The following table sets forth the high and low market prices per share of our common stock as reported by the New York Stock Exchange and the amount of cash dividends per common share we paid during each quarter in ~~2014~~2016 and ~~2013:~~2015:


	Fiscal Year												Fiscal Year
	2014						2013						2016						2015
	High		Low		Dividend		High		Low		Dividend		High		Low		Dividend		High		Low		Dividend
1st Quarter	$	25.39	$	18.39	$	0.125	$	29.59	$	22.65	$	0.100	$	9.00	$	6.60	$	0.150	$	23.26	$	19.09	$	0.140
2nd Quarter	20.46		17.63		0.125		28.50		21.53		0.125		7.57		4.44		0.150		20.27		15.85		0.140
3rd Quarter	19.33		15.79		0.140		25.31		18.41		0.125		6.56		4.97		0.150		18.05		8.85		0.150
4th Quarter	22.52		15.71		0.140		22.99		19.35		0.125		5.88		2.72		0.150		10.70		6.00		0.150

On June 11, 2014, we announced that our Board of Directors ("Board") approved a 12% increase in our quarterly cash dividend rate to $0.14 per share from the previous quarterly rate of $0.125 per share. The new quarterly rate of $0.14 per share is applicable to dividends declared by the Board beginning on August 21, 2014.

We paid aggregate cash dividends in ~~2014~~2016 and ~~2013~~2015 of ~~$17.0~~$16.7 million and ~~$15.5~~$18.7 million, respectively.~~While we expect to continue payment of quarterly cash dividends, the~~ The declaration and payment of future quarterly cash dividends ~~are~~remain subject to the review and discretion of our Board. ~~Any future determination~~Future determinations to pay dividends will ~~depend on~~continue to be evaluated in light of our results of operations, cash flow and financial condition, as well as meeting certain criteria under ~~our~~the Revolving Credit Facility (as defined in ~~"Liquidity~~“Liquidity and Capital ~~Resources"~~Resources”) and other factors deemed relevant by our Board.

As of the close of trading on the New York Stock Exchange on March ~~24, 2015~~21, 2017 there were approximately ~~258~~242 holders of record of our common stock.

~~Table of Contents~~

Performance Graph

The annual changes for the five-year period shown in the following graph are based on the assumption that $100 had been invested in each of our common stock, the S&P 500 Index and the S&P ~~500 Retail~~1500 Department Stores Index on January ~~29, 2010~~27, 2012 (the last trading date of ~~2009)~~2011), and that all quarterly dividends were reinvested at the ~~average~~closing prices of the ~~closing prices at the beginning and end of the quarter.~~dividend payment dates. Subsequent measurement points are the last trading days of ~~2010, 2011,~~ 2012, 2013, 2014, 2015 and ~~2014.~~2016. The total cumulative dollar returns shown on the graph represent the value that such investments would have had on January ~~30, 2015~~27, 2017 (the last trading date of ~~2014)~~2016). The calculations exclude trading commissions and taxes. The stock price performance on the following graph and table is not necessarily indicative of future stock price performance.


Date	Stage Stores, Inc.	S&P 500 Index	S&P 500 Retail Index	Stage Stores, Inc.	S&P 500 Index	S&P 1500 Department Stores Index
1/29/2010	$100.00	$100.00	$100.00
1/28/2011	123.96	118.85	125.46
1/27/2012	127.01	122.58	140.39	$100.00	$100.00	$100.00
2/1/2013	188.25	140.91	176.18	148.29	117.61	103.75
1/31/2014	164.01	166.00	218.28	129.39	141.49	117.53
1/30/2015	172.25	185.78	259.21	135.75	161.61	146.46
1/29/2016				59.02	160.54	107.54
1/27/2017				21.76	194.04	87.15

Stock Repurchase Program

On March 7, 2011, our Board approved a stock repurchase program ("(“2011 Stock Repurchase ~~Program"~~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 ~~repurchased $200.0 million of our outstanding common stock,~~exhausted the authorization, unless terminated earlier by our Board. Through ~~June 10, 2012,~~January 28, 2017, we repurchased approximately ~~$100.1~~$141.6 million of our outstanding common stock under the 2011 Stock Repurchase Program. ~~On June 11, 2012, we announced that our Board had chosen not to spend additional capital under the~~Also in March 2011, ~~Stock Repurchase Program for the time being. In addition,~~ 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 ~~("SARs"~~(“SARs”) and other equity grants. Purchases of shares of our common stock ~~under this authorization~~ 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 our common stock during the fourth quarter of ~~2014:~~2016:

^(a)Although we did not repurchase any of our common stock during the fourth quarter of ~~2014~~2016 under the 2011 Stock Repurchase Program:

We repurchased 171,914 shares of common stock for approximately $2.7 million at a weighted average price of $15.99 associated with the proceeds and related tax benefits from the exercise of stock options, SARs and other equity grants;

^(b)Reflects the $200.0 million authorized under the 2011 Stock Purchase Program, less the ~~$100.1~~$141.6 million repurchased as of January 28, 2017 using our existing cash, cash flow and other liquidity sources since March 2011.

~~Table of Contents~~

ITEM 6. SELECTED FINANCIAL DATA

The following sets forth selected consolidated financial data for the periods indicated. Financial results for 2016, 2015, 2014, ~~2013, 2011,~~ and ~~2010~~2013 are based on a 52-week period. Financial results for 2012 are based on a 53-week period. The selected consolidated financial data should be read in conjunction with our Consolidated Financial Statements included herein. All amounts are stated in thousands, except for per share data, percentages and number of stores.


	Fiscal Year															Fiscal Year
	2014			2013			2012			2011			2010			2016			2015			2014			2013			2012
Statement of operations data:
Net sales	$	1,638,569		$	1,609,481		$	1,627,702		$	1,511,220		$	1,470,590		$	1,442,718		$	1,604,433		$	1,638,569		$	1,609,481		$	1,627,702
Cost of sales and related buying, occupancy and distribution expenses	1,188,763			1,172,995			1,168,907			1,099,982			1,053,766			1,144,666			1,208,002			1,188,763			1,172,995			1,168,907
Gross profit	449,806			436,486			458,795			411,238			416,824			298,052			396,431			449,806			436,486			458,795

Selling, general and administrative expenses	383,616			390,224			387,332			353,055			350,865			356,064			387,859			386,104			393,126			389,495
Store opening costs	2,488			2,902			2,163			5,305			3,192
Interest expense, net	3,002			2,744			3,011			3,821			3,875
Interest expense																5,051			2,977			3,002			2,744			3,011
Income from continuing operations before income tax	60,700			40,616			66,289			49,057			58,892			(63,063		)	5,595			60,700			40,616			66,289

Income tax expense	22,847			15,400			24,373			16,930			21,252
Income from continuing operations	37,853			25,216			41,916			32,127			37,640
Loss from discontinued operations, net	(7,003		)	(8,574		)	(3,737		)	(1,167		)	—
Net income	$	30,850		$	16,642		$	38,179		$	30,960		$	37,640
Adjusted earnings (non-GAAP) ^(a)	$	37,853		$	39,986		$	46,296		$	32,127		$	37,640
Income tax expense (benefit)																(25,166		)	1,815			22,847			15,400			24,373
Income (loss) from continuing operations																(37,897		)	3,780			37,853			25,216			41,916
Loss from discontinued operations, net ^(a)																—			—			(7,003		)	(8,574		)	(3,737		)
Net income (loss)																$	(37,897	)	$	3,780		$	30,850		$	16,642		$	38,179
Adjusted net income (loss) (non-GAAP) ^(b)																$	(24,078	)	$	16,182		$	37,853		$	39,986		$	46,296

Basic earnings per share data
Basic earnings (loss) per share data:
Continuing operations	$	1.18		$	0.78		$	1.32		$	0.96		$	1.00		$	(1.40	)	$	0.12		$	1.18		$	0.78		$	1.32
Discontinued operations	$	(0.22	)	$	(0.27	)	$	(0.12	)	$	(0.04	)	$	—		—			—			(0.22		)	(0.27		)	(0.12		)
Basic earnings per share ^(b)	$	0.96		$	0.51		$	1.20		$	0.93		$	1.00
Basic weighted average common shares outstanding	31,675			32,034			31,278			33,021			37,656
Basic earnings (loss) per share																$	(1.40	)	$	0.12		$	0.96		$	0.51		$	1.20
Basic weighted average shares outstanding																27,090			31,145			31,675			32,034			31,278

Diluted earnings per share data
Diluted earnings (loss) per share data:
Continuing operations	$	1.18		$	0.77		$	1.31		$	0.95		$	0.99		$	(1.40	)	$	0.12		$	1.18		$	0.77		$	1.31
Discontinued operations	$	(0.22	)	$	(0.26	)	$	(0.12	)	$	(0.03	)	$	—
Diluted earnings per share	$	0.96		$	0.51		$	1.19		$	0.92		$	0.99
Adjusted diluted earnings per share (non-GAAP) ^(a)	$	1.18		$	1.22		$	1.44		$	0.95		$	0.99
Diluted weighted average common shares outstanding	31,763			32,311			31,600			33,278			38,010
Discontinued operations ^(a)																—			—			(0.22		)	(0.26		)	(0.12		)
Diluted earnings (loss) per share																$	(1.40	)	$	0.12		$	0.96		$	0.51		$	1.19
Adjusted diluted earnings (loss) per share (non-GAAP) ^(b)																$	(0.89	)	$	0.51		$	1.18		$	1.22		$	1.44
Diluted weighted average shares outstanding																27,090			31,188			31,763			32,311			31,600

Margin and other data:
Gross profit margin	27.5		%	27.1		%	28.2		%	27.2		%	28.3		%	20.7		%	24.7		%	27.5		%	27.1		%	28.2		%
Selling, general and administrative expense rate	23.4		%	24.2		%	23.8		%	23.4		%	23.9		%	24.7		%	24.2		%	23.6		%	24.4		%	23.9		%
Capital expenditures	$	70,580		$	61,263		$	49,489		$	45,731		$	36,990		$	74,257		$	90,695		$	70,580		$	61,263		$	49,489
Construction allowances from landlords	5,538			4,162			4,193			4,499			5,476			7,079			3,444			5,538			4,162			4,193
Stock repurchases	4,599			33,748			387			110,919			31,976			—			41,587			2,755			31,367			61
Cash dividends per share	0.53			0.48			0.38			0.33			0.25			0.60			0.58			0.53			0.48			0.38

~~Table of Contents~~


																Fiscal Year
																2016			2015			2014			2013			2012
Store data:
Comparable sales growth (decline) ^(c)	1.4		%	(1.5		)%	5.7		%	0.5		%	0.2		%	(8.8		)%	(2.0		)%	1.4		%	(1.5		)%	5.7		%
Store openings ^(d)	18			28			25			34			33			—			3			18			28			25
Store closings ^(d)	12			10			5			10			5			37			23			12			10			5
Number of stores open at end of period ^(d)	854			848			830			810			786			798			834			854			848			830
Total selling area square footage at end of period ^(d)	15,409			15,313			15,255			15,027			14,681			14,588			15,130			15,409			15,313			15,255

	January 31,			February 1,			February 2,			January 28,			January 29,			January 28,			January 30,			January 31,			February 1,			February 2,
	2015			2014			2013			2012			2011			2017			2016			2015			2014			2013
Balance sheet data:
Working capital	$	299,279		$	293,995		$	259,260		$	213,700		$	262,100		$	296,091		$	344,880		$	299,279		$	293,995		$	259,260
Total assets	824,677			810,837			794,871			735,339			796,084			786,989			848,099			824,677			810,837			794,871
Debt obligations	47,388			63,225			12,329			49,503			38,492			170,163			165,723			47,388			63,225			12,329
Stockholders' equity	475,930			454,444			464,870			412,706			489,509			380,160			429,753			475,930			454,444			464,870

^(a) Discontinued operations reflect the results of Steele’s, which was divested in 2014.

^(b)See Reconciliation of Non-GAAP Financial Measures ~~following below~~on page 24 for additional information and reconciliation to the most directly comparable U.S. GAAP financial measure.

^(b) ~~Earnings per share may not foot due to rounding.~~

^(c)We follow the retail reporting calendar, which included an extra week of sales in the fourth quarter of 2012. However, many retailers report comparable sales on a shifted calendar, which excludes the first week of 2012 rather than the fifty-third week. On this shifted basis, comparable sales decreased 1.1% for 2013.

^(d)Excludes ~~Steele's~~Steele’s stores ~~that~~which are ~~now~~ reflected in discontinued operations.

Non-GAAP Financial Measures

~~The following supplemental information presents~~To provide additional transparency, we have disclosed the results of operations for ~~2014, 2013 and 2012~~the years presented on a basis in conformity with accounting principles generally accepted in the United States of America ~~("GAAP"~~(“GAAP”) and on a non-GAAP basis to show earnings ~~with and without charges associated with the South Hill Consolidation (see Note 16) and our former Chief Executive Officer's resignation.~~excluding certain items presented below. We believe this supplemental financial information enhances an ~~investor's~~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 earnings per share):



	Fiscal Year
	2016			2015			2014			2013			2012
Net income (loss) (GAAP)	$	(37,897	)	$	3,780		$	30,850		$	16,642		$	38,179
Loss from discontinued operations, net of tax benefit of $4,228, $5,237 and $2,172, respectively (GAAP)^(a)	—			—			7,003			8,574			3,737
Income (loss) from continuing operations (GAAP)	(37,897		)	3,780			37,853			25,216			41,916
Consolidation of corporate headquarters (pretax)^(b)	110			3,538			—			—			—
Severance charges associated with workforce reductions and pension settlement (pretax)^(c)	1,632			2,633			—			—			—
Store closures, impairments and other strategic initiatives (pretax)^(d)	21,256			12,186			—			—			—
South Hill Consolidation related charges (pretax)^(e)	—			—			—			23,789			3,618
Former Chief Executive Officer resignation related charges (pretax)^(f)	—			—			—			—			3,308
Income tax impact^(g)	(9,179		)	(5,955		)	—			(9,019		)	(2,546		)
Adjusted net income (loss) (non-GAAP)	$	(24,078	)	$	16,182		$	37,853		$	39,986		$	46,296

Diluted earnings (loss) per share (GAAP)	$	(1.40	)	$	0.12		$	0.96		$	0.51		$	1.19
Loss from discontinued operations (GAAP)^(a)	—			—			(0.22		)	(0.26		)	(0.12		)
Diluted earnings (loss) per share from continuing operations (GAAP)	(1.40		)	0.12			1.18			0.77			1.31
Consolidation of corporate headquarters (pretax)^(b)	—			0.11			—			—			—
Severance charges associated with workforce reduction and pension settlement (pretax)^(c)	0.06			0.08			—			—			—
Store closures, impairments and other strategic initiatives (pretax)^(d)	0.78			0.39			—			—			—
South Hill Consolidation related charges (pretax)^(e)	—			—			—			0.73			0.11
Former Chief Executive Officer resignation related charges (pretax)^(f)	—			—			—			—			0.10
Income tax impact^(g)	(0.33		)	(0.19		)	—			(0.28		)	(0.08		)
Adjusted diluted earnings (loss) per share (non-GAAP)	$	(0.89	)	$	0.51		$	1.18		$	1.22		$	1.44

Fiscal Year
2014 2013 2012
Net income (GAAP) $ 30,850
$ 16,642
$ 38,179
Loss from discontinued operations, net of tax benefit of $4,228, $5,237 and $2,172, respectively (7,003 ) (8,574 ) (3,737 )
Income from continuing operations 37,853
25,216
41,916
South Hill Consolidation related charges, net of tax of $9,019 and $1,330, respectively —
14,770
2,288
Former Chief Executive Officer resignation related charges, net of tax of $1,216 —
—
2,092
Adjusted earnings (non-GAAP)^(a)
$ 37,853
$ 39,986
$ 46,296

Diluted earnings per share (GAAP) $ 0.96
$ 0.51
$ 1.19
Loss from discontinued operations (0.22 ) (0.26 ) (0.12 )
Income from continuing operations 1.18
0.77
1.31
South Hill Consolidation related charges —
0.45
0.07
Former Chief Executive Officer resignation related charges —
—
0.07
Adjusted diluted earnings per share (non-GAAP) ^{(a) (b)}
$ 1.18
$ 1.22
$ 1.44

^(a) 2014 amounts are not adjusted.

^(b) Earnings per share may not foot due to rounding.

^(a) Discontinued operations reflect the results of Steele’s, which was divested in 2014.

^(b) 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.

^(c) Includes severance charges associated with workforce reductions and pension settlement of $0.7 million in 2015 as a result of lump sum payments exceeding interest cost for 2015.

^(d)Charges in 2016 reflect impairment charges recognized as a result of deteriorating operating performance of our stores (see Notes 3 and 4 to the financial statements) and costs related to our strategic store closure plan and other initiatives announced in 2015. Charges reflected for 2015 are related to our strategic store closure plan and primarily consist of impairment charges as well as fixture moving costs and lease termination charges, and other strategic initiatives.

^(e) Reflects charges associated with the consolidation of our operations in South Hill, Virginia, into our corporate headquarters. The charges were primarily for transitional payroll and benefits, recruiting and relocation costs, severance, property and equipment impairment and inventory markdowns.

^(f)Reflects charges incurred associated with the resignation of our former Chief Executive Officer.

^(g) Taxes were allocated based on the annual effective tax rate.

ITEM 7. ~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~The results of operations for 2014 and 2013 are based on 52-week periods and for 2012 is based on a 53-week period.~~

We are a retailer operating specialty department stores primarily in small and mid-sized towns and communities. We provide customers a welcoming and comfortable shopping experience in our stores and ~~direct-to-consumer business.~~online. Our merchandise assortment is a well-edited selection of moderately priced brand name and private label apparel, accessories, cosmetics, footwear and home goods. As of January ~~31, 2015,~~28, 2017, we operated ~~854~~798 specialty department stores located in 4038 states under the BEALLS, ~~GOODY'S,~~GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and a direct-to-consumer business.

On March 7, 2014, we divested ~~Steele's,~~Steele’s, an off-price concept that we launched in November 2011, in order to focus solely on our core specialty department store business. Accordingly, the results of operations of ~~Steele's~~Steele’s and loss on the sale are reflected in discontinued operations for all periods presented. Our results of operations for all periods presented within ~~Management's~~this Management’s Discussion and Analysis reflect continuing operations. For additional information regarding discontinued operations, see Note 15 to the consolidated financial statements.

Results of Operations

~~Our strategy~~Select financial results for 2014 was to build on our prior year achievements and to pursue meaningful sales and earnings growth. Reflecting the successful implementation of our business strategy, we achieved the following results in 20142016 were as follows (comparisons are to ~~2013)~~2015):

~~Financial Highlights~~

~~Strategic Highlights~~2016 Strategy and Results

~~To enhance~~While 2016 was a difficult year for our ~~focus on~~business, our ~~core specialty department store~~sector, and certain of our geographies, we made progress in evolving our business ~~we completed~~model to meet the ~~sale~~changing habits of ~~off-price concept Steele’s~~our customer. Despite our depressed results of operations caused by challenges in the ~~first quarter of 2014.~~retail industry, as well as headwinds in our stores near the Mexican border and in energy exposed communities, we did accomplish or make significant strides on strategic initiatives that we expect to position us for improved productivity and profitability over time.

~~We implemented store-level mark down optimization and continued to make progress on size pack optimization.~~

We launched Style Circle Rewards^®, our tender-neutral loyalty program, which complements our existing private label credit card and will allow us to better understand our customers’ shopping habits, offer more personalized promotional offers, and provide attractive rewards. We ended the year with 4.7 million members, including our private label credit card holders. In addition, we grew our private label credit card penetration by 290 basis points to 47.3% of sales, with credit income increasing 2%.

~~2015~~2017 Strategy and Outlook

Our ~~strategy~~key strategic initiatives for 2017, which we call our JumpStart Plan, are to:

While we expect to continue facing external headwinds and reduced traffic in our stores, we believe that there are multiple opportunities to drive sales ~~productivity in existing stores~~ and enhance our ~~direct-to-consumer business~~financial performance by ~~featuring quality, trend-right merchandise at~~continuing to focus on giving our customers style and value with a ~~compelling value~~great experience. From a profitability perspective, we believe we can begin to rebuild margins and ~~refining~~will continue our ~~experience~~disciplined expense controls. A primary objective of our 2017 financial plan is to generate positive free cash flow (defined as net cash provided by operating activities less capital expenditures net of proceeds related to retirements). We will do this by operating efficiently, improving comparable sales and margin through our JumpStart Plan, reducing capital expenditures, and improving working capital so it is a source of cash. Overall, we believe we are making the right investments in the store environment, our direct-to-consumer business and our marketing touch points. We intend to lead with trend-right and style driven assortments and friendly service to foster a fun, comfortable shopping experience that translates to higher units sold and higher average unit retails.

~~Expand the Penetration and Presence~~right areas of our ~~Direct-to-Consumer Business. We expect~~business to ~~improve~~energize our brand, ~~experience with a growing direct-to-consumer business. Our direct-to-consumer business reinforces~~stores, website, and ~~builds further brand awareness~~customers, and grew by 25.7% in 2014, representing 2.3% of our total sales. We have expanded assortments, implemented functionality enhancements and broadened centralized fulfillment, and we plan to continue making significant investments in our direct-to-consumer business that will further enhance our customers’ shopping experience from an assortment, technology and fulfillment perspective.

In 2015, we plan to slow our new store growth as we embark on a multi-year initiative to increase investments in our direct-to-consumer business and existing stores. We anticipate opening 2 new stores in 2015. We continually review the profitability of each store and look to close a store if the expected store performance does not meet our financial hurdle rates. We expect to close 10-20 stores, where lease terms permit, in 2015.ultimately drive long-term shareholder value.

The financial information, discussion and analysis that follow should be read in conjunction with our Consolidated Financial Statements and accompanying footnotes included in this Form 10-K.

^(a) Percentages may not foot due to rounding.

Sales ~~for 2014 increased 1.8%~~decreased 10.1% to ~~$1,638.6~~$1,442.7 million in 2016 from ~~$1,609.5~~$1,604.4 million ~~for 2013.~~in 2015, reflecting a decline in comparable sales and closed stores. Comparable sales ~~which are~~includes sales infor stores that ~~are~~were open for at least 14 full months prior to the reporting period ~~including~~and direct-to-consumer sales. Comparable sales ~~increased by 1.4%~~decreased 8.8% in ~~2014~~2016 as compared to ~~a 1.5% decrease in 2013. Excluding direct-to-consumer sales, comparable sales increased 0.9% in 2014, as compared~~2015, attributable to a ~~2.0%~~ decrease of 13.2% in ~~2013.~~the number of transactions, partially offset by an increase of 5.1% in average transaction value. The ~~1.4%~~ increase in ~~comparable sales~~average transaction value was ~~driven primarily by~~comprised of a ~~4.9% gain~~1.6% decline in average unit retail ~~which was partially offset by~~and an increase of 6.8% in units per transaction. During 2016 and 2015, we experienced a decline in ~~units per transaction~~traffic in our stores and lower consumer demand, especially in our stores in Texas, Louisiana, Oklahoma and New Mexico, which were impacted by depressed oil prices, and in our markets near the ~~number~~Mexican border due to the devaluation of ~~transactions. The higher average selling price was achieved through effectively managing inventory levels, resulting~~the Mexican peso. Comparable sales in ~~an improved~~these four states were down 11.1%, while comparable sales in the balance ~~between regular priced and clearance goods.~~of our chain were down 6.0%.

Comparable sales increase (decrease) by quarter is presented below:

~~On a merchandise category basis,~~Our home/gifts, cosmetics ~~footwear, children's~~ and ~~home and gifts achieved positive comparable sales. Cosmetics had the strongest~~men’s categories outperformed our comparable sales ~~increase, driven by the installation of Estee Lauder~~average. Home, gifts, cosmetics and Clinique counters in 75 and 76 stores, respectively, during 2014. We also continued to focus on sales growth through the introduction of new product offerings and the expansion of existing sought-after brand names.dresses were strong performers across merchandise categories.

On a market population basis, utilizing a ten-mile radius from each store, small market stores (populations less than 50,000), mid-sized market stores (populations of 50,000 to 150,000) and higher-density market stores (populations greater than 150,000) had comparable sales increases in 2014 of 0.9%, 0.1% and 1.0%, respectively.

~~The following is a summary of the changes in the components of cost of sales between 2014 and 2013, expressed as a percent of sales:~~



	~~Increase (Decrease) in the Components of~~ ~~Cost of Sales~~
~~Merchandise cost of sales rate~~	~~(0.6)%~~
~~Buying, occupancy and distribution expenses rate~~	~~0.2~~
~~Cost of sales rate~~	~~(0.4)%~~

Gross profit in ~~2014~~2016 was ~~$449.8~~$298.1 million, ~~an increase~~a decrease of ~~3.1%~~24.8% from ~~$436.5~~$396.4 million in ~~2013.~~2015. Gross profit, as a percent of sales, ~~increased~~decreased 400 basis points to ~~27.5%~~20.7% in ~~2014~~2016 from ~~27.1%~~24.7% in ~~2013.~~2015. The ~~0.4% increase~~decrease in the gross profit rate reflects a ~~0.6%~~ decrease in ~~the~~ merchandise ~~cost~~margin of 140 basis points, as a result of additional promotions and markdowns to drive sales ~~rate~~ and ~~a 0.2%~~clear inventory, and an increase in the buying, occupancy and distribution expenses ~~rate. Merchandise cost~~rate of ~~sales for 2013 includes approximately $12.5 million, or approximately 0.8% of sales, related to the South Hill Consolidation~~260 basis points due to ~~inventory liquidation costs~~deleverage from lower sales in 2016 compared to 2015, increased rent and depreciation associated with ~~discontinued vendors~~remodeled stores and ~~merchandise and advertising allowances deferred in inventory. The increase in buying, occupancy and distribution expenses rate is a result~~store impairment charges. In 2016, we recorded store impairment charges of ~~higher store occupancy costs in 2014~~$19.9 million compared to ~~2013.~~$10.6 million in 2015.

Selling, General and Administrative Expenses

Selling, general and administrative ("(“SG~~&A"~~&A”) expenses in ~~2014~~2016 decreased ~~$6.6~~$31.8 million to ~~$383.6~~$356.1 million from ~~$390.2~~$387.9 million in ~~2013.~~2015. As a percent of sales, SG&A expenses ~~decreased~~increased to ~~23.4%~~24.7% in ~~2014~~2016 from 24.2% in ~~2013.~~2015 as a result of deleverage from lower sales in the current year. The decrease in SG&A expenses ~~reflects~~is primarily due to lower payroll, advertising, incentive compensation and lower charges ~~of approximately $11.3 million~~ incurred in ~~2013~~2016 related to ~~the South Hill Consolidation. In addition, the decrease in 2014 also reflects increased credit income from~~ our ~~private label credit card program. These reductions were partially offset by higher incentive compensation expense in 2014.~~

~~Store Opening Costs~~

~~Store opening~~corporate headquarters consolidation and severance costs ~~in 2014 were $2.5 million, which included costs related~~associated with our workforce reduction compared to opening 18 new stores and relocating 7 stores. In 2013, we incurred $2.9 million, which included costs related to opening 28 new stores and relocating 3 stores. Store opening costs are expensed as incurred and include costs of stores opening in future quarters.2015.

Interest expense was $5.1 million in 2016 and $3.0 million in ~~2014 and $2.7 million in 2013.~~2015. Interest expense iswas 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 ~~lease~~ obligations. The increase in interest expense is primarily due to ~~increased~~an increase in average borrowings onand interest rate under the Revolving Credit ~~Facility.~~Facility for 2016 as compared with 2015.

Our effective tax rate was 39.9% in ~~2014 was 37.6%,~~2016, resulting in tax ~~expense~~benefit of ~~$22.8~~$25.2 million. This compares to income tax expense of ~~$15.4~~$1.8 million in ~~2013~~2015 at an effective rate of ~~37.9%~~32.4%. The prior year effective tax rate was lower than usual due to the low net income which increased the net beneficial effect of permanent book-tax differences. The current year increase in the effective tax rate is primarily due to net loss, which causes permanent tax benefits, which included a $0.7 million benefit associated with the favorable resolution of an uncertain tax position under audit, that would normally reduce the effective tax rate to be reflected as an increased percentage of the net loss.

^(a) Percentages may not foot due to rounding.

Sales ~~for 2013~~ decreased ~~1.1%~~2.1% to ~~$1,609.5~~$1,604.4 million in 2015 from ~~$1,627.7~~$1,638.6 million ~~for 2012. Periods of unseasonable and severe weather, an intense promotional environment and weakness~~ in ~~the overall apparel market negatively impacted sales in 2013 compared to 2012.~~2014. Comparable sales decreased by ~~1.5%~~2.0% in ~~2013. The 1.5% decrease~~2015 as compared to 2014, attributable to a decline in ~~comparable sales for 2013 reflects a combination of a 1.3%~~traffic, partially offset by an increase ~~in the number of transactions, a decrease of 3.3%~~ in average unit ~~retail~~retail. Sales in 2015 were negatively impacted by lower consumer demand in our markets near the Mexican border due to the devaluation of the Mexican peso and ~~an increase of 0.3%~~ in ~~units per transaction. This compares to a 5.7% increase~~energy exposed communities mostly in ~~comparable~~Texas, Louisiana, Oklahoma and New Mexico. In addition, sales in ~~2012. Excluding direct-to-consumer sales, comparable sales decreased 2.0% in 2013 as compared to a 5.2% increase in 2012. Many retailers report comparable sales on a shifted calendar, which excludes~~ the ~~first week of 2012 rather than the fifty-third week. On this shifted basis, comparable sales for 2013 decreased 1.1%.~~fourth quarter 2015 were negatively impacted by unfavorable weather.

Comparable sales increase (decrease) by quarter is presented below:

~~On a merchandise category basis,~~Our cosmetics ~~footwear, home~~ and home/gifts ~~men's and children's all outperformed~~categories achieved positive comparable sales. Both categories benefited from our ~~comparable sales average. Cosmetics had the strongest comparable sales increases driven by~~strategic investments in 2015, with the installation of Estee Lauder ~~counters in 35 stores~~ and Clinique counters in 37over 30 stores ~~during 2013. Footwear~~and home department expansions in 46 stores. Activewear was ~~driven by sales of key brands such as Sperry, Nike, and Skechers. Home and gifts benefited from new product launches such as Keurig and Cuisinart.~~a strong performer across merchandise categories.

On a market population basis, utilizing a ten-mile radius from each store, the larger market stores outperformed the smaller markets. Our higher-density markets (populations greater than 150,000) had a comparable sales increase of 0.5%, while the mid-sized (populations of 50,000 to 150,000) and smaller market stores (populations less than 50,000) experienced a comparable sales decrease of 0.9% and 2.7%, respectively.

~~The following is a summary of the changes in the components of cost of sales between 2013 and 2012, expressed as a percent of sales:~~



	~~Increase in the Components of~~ ~~Cost of Sales~~
~~Merchandise cost of sales rate~~	~~0.9%~~
~~Buying, occupancy and distribution expenses rate~~	~~0.2~~
~~Cost of sales rate~~	~~1.1%~~

Gross profit in ~~2013~~2015 was ~~$436.5~~$396.4 million, a decrease of ~~4.9%~~11.9% from ~~$458.8~~$449.8 million in ~~2012.~~2014. Gross profit as a percent of sales decreased 280 basis points to ~~27.1%~~24.7% in ~~2013~~2015 from ~~28.2%~~27.5% in ~~2012.~~2014. The ~~1.1% decline~~decrease in the gross profit rate reflects a ~~0.9% increase~~decrease in ~~the~~ merchandise ~~cost~~margin of 110 basis points, as a result of additional promotions and markdowns to drive sales ~~rate~~ and ~~a 0.2%~~clear inventory, and an increase in the buying, occupancy and distribution expenses ~~rate. Merchandise cost~~rate of ~~sales for 2013 includes approximately $12.5~~170 basis points due to impairment charges of $10.6 million, or ~~approximately 0.8%~~0.7% of sales, related to the South Hill Consolidation due to inventory liquidation costs associated with discontinued vendors and merchandise and advertising allowances deferred in inventory. The increase in buying, occupancy and distribution expenses rate is a result ofour store closures, higher store ~~occupancy costs~~depreciation and ~~deleveraging from lower sales~~rent expense, and increased strategic investments in ~~2013~~omni-channel, technology and stores in 2015 compared to ~~2012.~~2014.

Selling, General and Administrative Expenses

SG&A expenses in ~~2013~~2015 increased ~~$2.9~~$1.8 million to ~~$390.2~~$387.9 million from ~~$387.3~~$386.1 million in ~~2012.~~2014. As a percent of sales, SG&A expenses increased to 24.2% in ~~2013~~2015 from ~~23.8%~~23.6% in ~~2012.~~2014 and primarily reflects deleverage from lower sales in 2015. The increase in SG&A expenses reflects charges ~~of approximately $11.3 million~~ incurred in ~~2013~~2015 related to ~~the South Hill Consolidation, while 2012 included $3.3 million of charges~~our corporate headquarters consolidation, severance and other costs associated with ~~the resignation of our former Chief Executive Officer~~a reduction in corporate headcount, and $1.1 million associated with the South Hill Consolidation. In addition, the increase in 2013 also reflects incremental costs to operate 18 net additional stores and higher medical insurance costs resulting from several large claims as compared to 2012. These higher costs werea pension settlement charge, partially offset by ~~higher credit income associated with our private label credit card portfolio and~~ lower incentive compensation costs.

~~Store Opening Costs~~

Store opening costs in 2013 were $2.9 million, which included costs related to opening 28 new stores and relocating 3 stores. In 2012, we incurred $2.2 million, which included costs related to opening 25 new stores and relocating 6 stores. Store opening costs are expensed as incurred and include costs of stores opening in future quarters.

Interest expense was ~~$2.7 million in 2013 and~~ $3.0 million in ~~2012.~~2015 and 2014, respectively. Interest expense iswas 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 ~~lease obligations and equipment financing notes. The decrease~~obligations. Interest expense in ~~interest expense is~~2015 was flat compared to 2014 due to primarily due to the ~~reduced amount~~timing of ~~long-term debt obligations, as we paid off our equipment financing notes in the second quarter of 2012, which is offset by increased~~ borrowings onunder the Revolving Credit Facility.

Our effective tax rate in ~~2013~~2015 was ~~37.9%~~32.4%, resulting in tax expense of ~~$15.4~~$1.8 million. This compares to income tax expense of ~~$24.4~~$22.8 million from continuing operations in ~~2012~~2014 at an effective rate of ~~36.8%~~37.6%. The ~~2013~~2015 effective tax rate ~~increased~~was lower than usual due to low net income which increased the ~~recording~~net beneficial effect of ~~a $0.5 million reserve related to an uncertain tax position.~~permanent book-tax differences.

Seasonality and Inflation

Historically, our business ishas been seasonal and sales are traditionally lower during the first three quarters of the fiscal year (February through October) and higher during the last quarter of the fiscal year (November through January). The fourth quarter usually accounts for approximately ~~30%~~32% of our annual sales, with each of the other quarters accounting for approximately 22% to 24%. Working capital requirements ~~fluctuate~~have fluctuated during the year and generally ~~reach~~reached their highest levels during the third and fourth quarters. 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.

The following table shows quarterly information (unaudited) (in thousands, except per share amounts):

Fiscal Year 2014
Q1 Q2 Q3 Q4
Net sales $ 372,040

$ 377,446
$ 364,197

$ 524,886
Gross profit 77,941
112,340
88,166

171,359

Income (loss) from continuing operations $ (12,046 ) $ 11,192
$ (5,107 ) $ 43,814
Loss from discontinued operations (6,748 ) —
(161 ) (94 )
Net income (loss) $ (18,794 ) $ 11,192
$ (5,268 )
$ 43,720

Basic earnings (loss) per share data:
Continuing operations $ (0.38 ) $ 0.35
$ (0.16 ) $ 1.37
Discontinued operations (0.22 ) —
(0.01 ) —
Basic earnings (loss) per common share (0.60 ) 0.35
(0.17 )
1.37

Diluted earnings (loss) per share data:
Continuing operations $ (0.38 ) $ 0.35
$ (0.16 ) $ 1.36
Discontinued operations (0.22 ) —
(0.01 ) —
Diluted earnings (loss) per common share (0.60 ) 0.35
(0.17 )
1.36

Basic weighted average shares 31,492
31,757
31,794

31,657
Diluted weighted average shares 31,492
31,825
31,794

31,740

Fiscal Year 2013
Q1 Q2 Q3 Q4
Net sales $ 372,103
$ 389,991
$ 354,850
$ 492,537
Gross profit 89,629
115,575
83,290
147,992

Income (loss) from continuing operations $ (6,188 ) $ 10,832
$ (9,573 ) $ 30,145
Loss from discontinued operations (668 ) (1,225 ) (1,398 ) (5,283 )
Net income (loss) $ (6,856 ) $ 9,607
$ (10,971 ) $ 24,862
Adjusted earnings (loss) (non-GAAP) ^(a)
$ (126 ) $ 14,936
$ (7,021 ) $ 32,197

Basic earnings (loss) per share data:
Continuing operations $ (0.19 ) $ 0.33
$ (0.30 ) $ 0.95
Discontinued operations (0.02 ) (0.04 ) (0.04 ) (0.17 )
Basic earnings (loss) per common share (0.21 ) 0.29
(0.34 ) 0.79

Diluted earnings (loss) per share data:
Continuing operations $ (0.19 ) $ 0.32
$ (0.30 ) $ 0.95
Discontinued operations (0.02 ) (0.03 ) (0.04 ) (0.17 )
Diluted earnings (loss) per common share (0.21 ) 0.29
(0.34 ) 0.78
Adjusted diluted earnings (loss) per common share ^(a)
—
0.45
(0.22 ) 1.01

Basic weighted average shares 32,306
32,762
31,854
31,215
Diluted weighted average shares 32,306
33,073
31,854
31,438



	Fiscal Year 2016
	Q1			Q2		Q3			Q4
Net sales	$	332,750		$	338,385	$	317,140		$	454,443
Gross profit	66,987			85,570		56,590			88,905
Net income (loss)	(15,460		)	41		(15,634		)	(6,844		)

Basic earnings (loss) per share	$	(0.57	)	$	—	$	(0.58	)	$	(0.25	)
Diluted earnings (loss) per share	(0.57		)	—		(0.58		)	(0.25		)

Basic weighted average shares	26,932			27,111		27,155			27,163
Diluted weighted average shares	26,932			27,175		27,155			27,163

	Fiscal Year 2015
	Q1			Q2		Q3			Q4
Net sales	$	369,313		$	380,916	$	351,575		$	502,629
Gross profit	80,929			98,455		76,096			140,951
Net income (loss)	(8,637		)	1,615		(10,183		)	20,985

Basic earnings (loss) per share	$	(0.27	)	$	0.05	$	(0.32	)	$	0.72
Diluted earnings (loss) per share	(0.27		)	0.05		(0.32		)	0.71

Basic weighted average shares	31,750			31,982		32,017			28,828
Diluted weighted average shares	31,750			32,013		32,017			28,848

^(a)~~See Item 6, Selected Financial Data, for discussion of this non-GAAP financial measure and reconciliation to the most directly comparable U.S. GAAP financial measure.~~

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) ~~our~~the Revolving Credit Facility. Our primary cash requirements are for ~~seasonal~~operational needs, including rent and ~~new store~~salaries, seasonal inventory purchases, ~~as well as~~ capital investments in our stores, direct-to-consumer business and information ~~technology~~technology. We also have used our cash flows and ~~the payment of our~~other liquidity sources to pay quarterly cash dividends.

While there can be no assurances, 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 ~~2015~~2017 and the foreseeable future.

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

Operating Activities

During 2016, we generated $84.3 million in cash from operating activities. Net loss, adjusted for non-cash expenses, provided cash of approximately $40.1 million. Changes in operating assets and liabilities generated net cash of approximately $37.1 million, which included a $26.6 million decrease in merchandise inventories, a decrease in other assets of $0.8 million and an increase in accounts payable and other liabilities of $9.8 million. Additionally, cash flows from operating activities included construction allowances from landlords of $7.1 million, which funded a portion of the capital expenditures related to store leasehold improvements in new and relocated stores and our new corporate office building.

During 2015, we generated $40.3 million in cash from operating activities. Net income, adjusted for non-cash expenses, provided cash of approximately $94.3 million. Changes in operating assets and liabilities used net cash of approximately $57.4 million, which included a $5.5 million decrease in merchandise inventories, a decrease in other assets of $1.6 million and a decrease in accounts payable and other liabilities of $64.4 million. Additionally, cash flows from operating activities included construction allowances from landlords of $3.4 million, which funded a portion of the capital expenditures related to store leasehold improvements in new and relocated stores.

During 2014, we generated $102.2 million in cash from operating activities. Net income, adjusted for non-cash expenses, provided cash of approximately $106.9 million. Changes in operating assets and liabilities used net cash of approximately $10.2 million, which included a $7.0 million increase in merchandise inventories, an increase in other assets of $1.7 million and a decrease in accounts payable and other liabilities of $1.5 million. Additionally, cash flows from operating activities ~~included construction allowances from landlords of $5.5 million, which funded a portion of the capital expenditures related to store leasehold improvements in new and relocated stores.~~

During 2013, we generated $46.5 million in cash from operating activities. Net income, adjusted for non-cash expenses, provided cash of approximately $95.9 million. Changes in operating assets and liabilities used net cash of approximately $53.5 million, which included a $20.5 million increase in merchandise inventories, an increase in other assets of $6.4 million and a decrease in accounts payable and other liabilities of $26.7 million. Additionally, cash flows from operating activities included construction allowances from landlords of $4.2 million, which funded a portion of the capital expenditures related to store leasehold improvements in new and relocated stores.

During 2012, we generated $76.0 million in cash from operating activities. Net income, adjusted for non-cash expenses, provided cash of approximately $106.3 million. Changes in operating assets and liabilities used net cash of approximately $34.5 million, which included a $66.0 million increase in merchandise inventories primarily to support the higher number of stores open and strategic investments in 2012 to support various sales initiatives and an increase in other assets of $4.8 million partially offset by an increase in accounts payable and other liabilities of $36.2 million. Additionally, cash flows from operating activities also included construction allowances from landlords amounting to ~~$4.2~~$5.5 million, which funded a portion of the capital expenditures related to store leasehold improvements in new and relocated stores.

Investing Activities

The following table summarizes key information about our investing activities for each period presented (in thousands, except number of stores):



	Fiscal Year
	2016		2015		2014
Capital expenditures	$	74,257	$	90,695	$	70,580
Construction allowances received from landlords	7,079		3,444		5,538
Capital expenditures, net of construction allowances	$	67,178	$	87,251	$	65,042

Number of stores remodeled, relocated and expanded	86		122		26
Number of new stores ^(a)	—		3		18

^(a) 2014 includes one Steele's store.

Capital expenditures in 2016 were primarily for ~~2014 were $70.6 million compared to $61.3 million in 2013~~store remodels, expansions and ~~$49.5 million in 2012. Capital expenditures during 2014 reflect increased~~relocations and investments in our ~~current stores through cosmetic counter installations~~technology and store expansions, partially offset by a decrease in store openings compared to 2013 and 2012. We opened 18 new stores and relocated 7 stores in 2014. In 2013, we opened 29 new stores (including one Steele's store) and relocated 3 stores. In 2012, we opened 56 new stores (including 31 Steele's stores) and relocated 6 stores. Weomni-channel. Construction allowances received ~~construction allowances~~ from landlords ~~of $5.5 million in 2014~~were used to fund a portion of the capital expenditures related to store leasehold improvements in ~~new~~remodeled and relocated stores ~~while $4.2 million~~ and ~~$4.2 million were received from landlords in 2013 and 2012, respectively.~~our new corporate office building. These funds have been recorded as deferred rent credits in the balance sheet and are amortized as an offset to rent expense over the lease term commencing with the date the allowances were contractually earned.

We estimate that capital expenditures in ~~2015,~~2017, net of construction allowances ~~to be received~~ from landlords, will be approximately ~~$75~~$35 to $40 million. The expenditures are principally for store remodels, expansions and relocations, new cosmetic counters, and investments in our technology, ~~including our direct-to-consumer business~~omni-channel and ~~the opening of new stores.~~supply chain.

Financing Activities

On ~~October 6, 2014,~~December 16, 2016, we entered into ~~a Second Amended and Restated Credit Agreement for a $350.0 million~~an amendment to our senior secured revolving credit facility ("(“Revolving Credit ~~Facility"~~Facility”). The ~~Revolving Credit Facility replaces our former $250.0~~amendment increased total capacity under the facility from $350.0 million ~~senior secured revolving credit facility, which was set~~ to ~~mature on June 30, 2016. The Revolving Credit Facility (i) increases availability to $300.0~~$450.0 million, ~~with~~including a $50.0 million seasonal increase ~~to $350.0 million, (ii) includes a $50.0~~and $25.0 million letter of credit ~~subfacility, (iii) provides better pricing terms,~~sublimit, and ~~(iv) extends~~extended the ~~maturity date to~~term from October 6, ~~2019.~~2019 until 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. During ~~2014,~~2016, the weighted average interest rate on outstanding borrowings and the average daily borrowings under the Revolving Credit Facility were ~~1.71%~~1.9% and ~~$81.4~~$192.4 million, respectively, as compared to ~~1.82%~~1.53% and ~~$57.6~~$102.5 million in ~~2013.~~

2015. The increase in average daily borrowings for 2016 compared to the 2015 is primarily due to stock repurchases made in the fourth quarter 2015 and capital expenditures.

Letters of credit issued under the Revolving Credit Facility support certain merchandise purchases and collateralize retained risks and deductibles under various insurance programs. At January ~~31, 2015,~~28, 2017, we had outstanding letters of credit totaling approximately ~~$6.7~~$6.4 million. These letters of credit expire within twelve months of issuance. Excess ~~borrowing~~ availability under the Revolving Credit Facility at January ~~31, 2015~~28, 2017 was ~~$251.4~~$122.3 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 and (iii) related party transactions.~~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 January ~~31, 2015,~~28, 2017, we were in compliance with all of the financial covenants of the Revolving Credit Facility agreement and expect to ~~remain~~continue to be in compliance in ~~2015.~~2017.

~~On June 11, 2014,~~During 2016, we ~~announced that our Board approved a 12% increase in our quarterly cash dividend rate to $0.14 per share from the previous quarterly~~borrowed approximately $5.8 million under an equipment financing note bearing an effective interest rate of ~~$0.125 per share.~~3.2%. The ~~new quarterly rate of $0.14 per share~~equipment financing note is ~~applicable to~~payable in monthly installments over a three-year term and is secured by certain equipment.

We paid $16.7 million in cash dividends ~~declared by our Board beginning August 21, 2014.~~in 2016. On February ~~20, 2015,~~16, 2017, our Board declared a quarterly cash dividend of ~~$0.14~~$0.15 per share on our common stock, payable on March ~~18, 2015,~~15, 2017, to shareholders of record at the close of business on ~~March 3, 2015.~~February 28, 2017.

As of January 28, 2017, we had $58.4 million available under the 2011 Stock Repurchase Program authorized on March 7, 2011, which authorized us to repurchase up to $200.0 million of our outstanding common stock.

Contractual Obligations

We have contractual commitments for purchases of merchandise inventories, services arising in the ordinary course of business, letters of credit, Revolving Credit Facility and other debt service and leases. The following table summarizes payments due under our contractual obligations at January ~~31, 2015~~28, 2017 (in thousands). These items are discussed in further detail in Note 6 and Note 11 to the consolidated financial statements.

Payment Due by Period
Contractual Obligations^(a)
Total
Less Than
One Year

1-3
Years

4-5
Years

More than 5
Years
Revolving Credit Facility $ 41,910
$ —
$ —
$ 41,910
$ —
Documentary letters of credit ^(b)
1,439
1,439
—
—
—
Capital (finance) lease obligations

Finance lease obligations 4,725
962
2,214
1,549
—
Interest payments on finance lease obligations 1,049
404
518
127
—
Other long-term debt obligations
753
753
—
—
—
Operating lease obligations ^(c)
454,079
89,763
152,368
99,925
112,023
Purchase obligations ^(d)
196,399
184,911
11,396
92
—
Other long-term liabilities ^(e)
3,000
1,000
2,000
—
—
Total contractual obligations $ 703,354
$ 279,232
$ 168,496
$ 143,603
$ 112,023



			Payment Due by Period
Contractual Obligations^(a)	Total		Less Than One Year		1-3 Years		4-5 Years		More than 5 Years
Revolving Credit Facility^(b)	$	159,702	$	—	$	—	$	159,702	$	—
Documentary letters of credit ^(c)	1,317		1,317		—		—		—
Finance obligations:
Principal payments	2,708		1,159		1,549		—		—
Interest payments	334		207		127		—		—
Other long-term debt obligations:
Principal payments	7,753		5,255		2,498		—		—
Interest payments	214		160		54		—		—
Operating lease obligations ^(d)	493,758		93,607		152,948		110,571		136,632
Purchase obligations ^(e)	174,314		160,690		11,154		2,460		10
Other long-term liabilities ^(f)	1,000		1,000		—		—		—
Total contractual obligations	$	841,100	$	263,395	$	168,330	$	272,733	$	136,642

^(a)The disclosure of contractual obligations in this table is based on assumptions and estimates that we believe to be reasonable as of the date of this report. Those assumptions and estimates may prove to be inaccurate; consequently, the amounts provided in the table may differ materially from those amounts that we ultimately incur. Variables that may cause the stated amounts to vary from the amounts actually incurred include, but are not limited to: the timing of termination of a contractual obligation; the acquisition of more or less services or goods under a contractual obligation than are anticipated by us as of the date of this report; fluctuations in third party fees, governmental charges, or market rates that we are obligated to pay under contracts we have with certain vendors; and the exercise of renewal options under, or the automatic renewal of, contracts that provide for the same.

^(b)Includes principal and interest accrued as of January 28, 2017.

^(c)These documentary letters of credit support the importing of private label merchandise. We also had outstanding stand-by letters of credit that totaled approximately ~~$5.3~~$5.1 million at January ~~31, 2015~~28, 2017 required to collateralize retained risks and deductibles under various insurance programs. The estimated liability that will be paid in cash related to stand-by letters of credit supporting insurance programs is reflected in accrued expenses. If we fail to make payments when due, the beneficiaries of letters of credit could make demand for payment under the letters of credit.

^(c)(d)We have operating leases related to office, property and equipment. Certain operating leases have provisions for step rent or escalation payments. We record rent expense on a straight-line basis, evenly dividing rent expense over the lease term, including the build-out period, if any, and where appropriate, applicable available lease renewal option periods. However, this accounting treatment does not affect the future annual operating lease cash obligations as shown herein. We record construction allowances from landlords as a deferred rent credit when earned. Such deferred rent credit is amortized over the related term of the lease, commencing with the date we contractually earned the construction allowance, as a reduction of rent expense.

Certain leases provide for contingent rents that are not measurable at inception. These contingent rents are primarily based on a percentage of sales that are in excess of a predetermined level. These amounts are excluded from minimum rent and are included in the determination of total rent expense when it is probable that the expense has been incurred and the amount is reasonably estimable.

^(d)(e)Purchase obligations include legally binding contracts for merchandise, utility purchases, capital expenditures, software acquisition/license commitments and legally binding service contracts. For the purposes of this table, contractual obligations for purchases of goods or services are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Included in purchase obligations are outstanding purchase orders in the ordinary course of business for merchandise of ~~$165.9~~$140.4 million that are typically made up to six months in advance of expected delivery. For non-merchandise purchase obligations, if the obligation to purchase goods or services is non-cancelable, the entire value of the contract is also included in the above table. If the obligation is cancelable, ~~but~~and we would incur liquidated damages if canceled, the dollar amount of the liquidated damages is included as a ~~"purchase~~“purchase obligation."” We fully expect to receive the benefits of the goods or services in connection with fulfilling our obligation under these agreements. The expected timing for payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the timing of receipt of goods or services or changes to agreed-upon amounts for some obligations.

^(e)(f)Other long-term liabilities consist of deferred rent, deferred compensation, pension liability, deferred revenue and other (see Note 7 to the consolidated financial statements). Deferred rent of ~~$45.1~~$43.4 million is included as a component of ~~"operating~~“operating lease ~~obligations"~~obligations” in the contractual obligations table. Deferred compensation and pension liability are not included in the contractual obligations table as the timing of future payments is indeterminable.

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 of 1974, as amended ~~("ERISA"~~(“ERISA”). 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 short-term liquidity needs of our defined benefit plan in order to maintain current invested positions. We had no minimum contribution requirements for ~~2013~~2015 and ~~2014 and we do not~~2016. We expect ~~a minimum contribution requirement in 2015.~~to contribute approximately $0.9 million during 2017.

We ~~have not included $0.6 million of current liabilities for~~had no unrecognized tax benefits and the related interest and penalties in the contractual obligations table because the timing of cash settlements is not reasonably estimable. It is reasonably possible that such tax positions may change within the next 12 months, primarily as a result of ongoing audits.at January 28, 2017.

~~Table of Contents~~

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The primary estimates underlying our consolidated financial statements include the valuation of inventory, the ~~estimated useful life of property, equipment and leasehold improvements, the~~ impairment analysis on long-lived assets, the valuation of ~~the~~ intangible ~~asset, the reserve for sales returns, breakage income on gift cards and merchandise credits,~~assets, self-insurance reserves and the estimated liability for pension obligations. We caution that future events rarely develop exactly as forecast, and the best estimates routinely require adjustment. Therefore, actual results may differ materially from these estimates. We base our estimates on historical experience and on various assumptions which are believed to be reasonable under the circumstances. The following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Inventory Valuation. We value merchandise inventories using the lower of cost or ~~market~~net realizable value with cost determined using the weighted average cost method. We capitalize distribution center costs associated with preparing inventory for sale, such as distribution payroll, benefits, occupancy, depreciation and other direct operating expenses as part of merchandise inventories. We also include in inventory the cost of freight to our distribution centers and to stores as well as duties and fees related to import purchases.

~~Property, Equipment and Leasehold Improvements.~~ Additions to property, equipment and leasehold improvements are recorded at cost and depreciated over their estimated useful lives using the straight-line method. The estimated useful lives of leasehold improvements do not exceed the term of the related lease, including applicable available renewal options where appropriate. The estimated useful lives in years are generally as follows:



~~Buildings & improvements~~	20
~~Store and office fixtures and equipment~~	~~5-10~~
~~Warehouse equipment~~	~~5-15~~
~~Leasehold improvements - stores~~	~~5-15~~
~~Leasehold improvements - corporate office~~	~~10-20~~

Impairment of Long-Lived Assets. Property, plant and equipment and other long-lived assets are reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. For long-lived assets to be held and used, we base our evaluation on impairment indicators such as the nature of the ~~asset's~~asset’s physical condition, the future economic benefit of the asset, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate the carrying amount of the asset may not be recoverable, we determine whether impairment has occurred through the use of an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If impairment has occurred, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. ~~Management's~~Management’s judgment is necessary to estimate fair value.

Intangible ~~Asset~~Assets and Impairment of Intangible Assets. Indefinite life intangible assets are tested for impairment annually or more frequently when indicators of impairment exist. As a part of the acquisition of Peebles, Inc. in 2003, we acquired the rights to the PEEBLES trade name and trademark (collectively, the ~~"Trademark"~~“Trademark”), which was identified as an indefinite life intangible. The value of the Trademark was determined to be $14.9 million at the time of the Peebles, Inc. acquisition. ~~Indefinite life intangible assets are not amortized but are tested for impairment annually or more frequently when indicators of impairment exist.~~ We completed our annual impairment ~~test~~testing during the fourth quarter of ~~2014~~2016 and determined ~~there was no impairment.~~

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~~Revenue Recognition.~~ ~~Our retail stores record revenue at~~that the ~~point of sale. Sales from our e-commerce website are recorded at~~fair value exceeded the time of shipment. Shipping and handling fees charged to customers are included in net sales with the corresponding costs recorded as costs of goods sold. Total revenues do not include sales tax because we are a pass-through conduit for collecting and remitting sales taxes. Revenues are recognized net of expected returns, which we estimate using historical return patterns as a percentage of sales.

We record deferred revenue on our balance sheet for the sale of gift cards and recognize this revenue upon the redemption of gift cards in net sales. We similarly record deferred revenue on our balance sheet for merchandise credits issued related to customer returns and recognize this revenue upon the redemption of the merchandise credits.

~~Gift Card and Merchandise Credits Liability.~~ Unredeemed gift cards and merchandise credits are recorded as a liability. Our gift cards and merchandise credits do not expire. Based on historical redemption rates, a small and relatively stable percentage of gift cards and merchandise credits will never be redeemed, which is referred to as "breakage." Estimated breakage income is recognized over time in proportion to actual gift card and merchandise credit redemptions. We recognized approximately $1.1 million, $1.0 million and $1.0 million of breakage income in 2014, 2013 and 2012, respectively, which is recorded as an offset to SG&A expenses.

~~Customer Loyalty Program.~~ Customers who spend a required amount within a specified time frame using our private label credit card receive reward certificates which can be redeemed for merchandise. We estimate the net cost of the rewards and record a liability associated with unredeemed certificates and customer spend toward unissued certificates. The cost of the loyalty rewards program benefit is recorded in cost of sales.carrying value by less than 10%.

Self-Insurance Reserves. We maintain ~~self-insurance~~self-insured retentions with respect to general liability, workers compensation and health benefits for our employees. We estimate the accruals for the liabilities based on industry development factors and historical claim trend experience. Although management believes adequate reserves have been provided for expected liabilities arising from our self-insured obligations, projections of future losses are inherently uncertain, and it is reasonably possible that estimates of these liabilities will change over the near term as circumstances develop.

Frozen Defined Benefit Plan. We maintain a frozen defined benefit plan. The ~~plan's~~plan’s obligations and related assets are presented in Note 13 to the consolidated financial statements. The ~~plan's~~plan’s assets are invested in actively managed and indexed mutual funds of domestic and international equities and investment-grade corporate bonds and U.S. government securities. The ~~plan's~~plan’s obligations and the annual pension expense are determined by independent actuaries using a number of assumptions. Key assumptions in measuring the ~~plan's~~plan’s obligations include the discount rate applied to future benefit obligations and the estimated future return on plan assets. At January ~~31, 2015,~~28, 2017, assumptions used were a weighted average discount rate of ~~3.9%~~4.3% and a weighted average long-term rate of return on the plan assets of 7.0%.

Recent Accounting Standards and Disclosures

In ~~April~~May 2014, the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) issued Accounting Standards Update ~~("ASU"~~(“ASU”) ~~No. 2014-08,~~ ~~Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity~~, which changes the criteria for reporting discontinued operations and also requires additional disclosures about discontinued operations. For public companies, the standard is effective prospectively for disposals that occur beginning on or after December 15, 2014, and interim periods within those years, with early adoption permitted. We did not early adopt this ASU.

~~In May 2014, the FASB issued ASU~~ 2014-09, Revenue from Contracts with Customers ~~(Topic 606)~~, which ~~provides a five-step analysis of transactions to determine when and how~~supersedes most existing revenue ~~is recognized.~~recognition guidance in GAAP. The core principle of the guidance is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects what a company expects to be entitled to in exchange for those goods or services. ~~This update~~ASU 2014-09 allows for either a retrospective or cumulative effect transition method of adoption. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year. The new revenue standard will be effective for us ~~retrospectively~~ in the first quarter of ~~2017 with early~~fiscal year ending February 2, 2019. We do not expect the adoption ~~not permitted.~~of ASU 2014-09 to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize the assets and liabilities that arise from finance and operating leases on the balance sheet. 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 year ending February 1, 2020. We are currently ~~assessing~~evaluating the impact that the adoption of this ASU will have on our consolidated financial statements and we expect that our reported assets and liabilities will significantly increase under the new standard.

In March 2016, the FASB issued 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, and classification on the statement of cash flows. Under the new standard, excess income tax benefits and tax deficiencies related to equity awards that vest or settle will be recognized as income tax expense, rather than within additional paid-in capital on the balance sheet. The recognition of excess tax benefits and losses may create significant volatility in earnings. We do not expect the adoption of the other requirements of this ASU to have a material impact on our consolidated financial statements. The new standard will be effective for us in the first quarter of fiscal year ending February 3, 2018.

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. We do not expect the adoption of this ASU to have a material impact on our consolidated statements of cash flows.

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 employers that offer or maintain defined benefit plans to disaggregate the service component from the other components of net benefit cost and provides guidance on presentation of the service component and the other components of net benefit cost in the statement of operations. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017. We are currently evaluating the impact that the adoption of ASU 2017-07 will have on our consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Borrowings under ~~our~~the Revolving Credit Facility bear a floating rate of interest. As of January ~~31, 2015,~~28, 2017, the outstanding borrowings under ~~our~~the Revolving Credit Facility were ~~$41.9~~$159.7 million. On future borrowings, an increase in interest rates may have a negative impact on our results of operations and cash flows. During ~~2014,~~2016, we had average daily borrowings of ~~$81.4~~$192.4 million bearing a weighted average interest rate of ~~1.71%~~1.9%. A hypothetical 10% change from the weighted average interest rate would have a ~~$0.1~~$0.4 million effect on our ~~2014~~2016 annual results of operations and cash flows.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See ~~"Index~~“Index to Consolidated Financial Statements of Stage Stores, Inc."” included on page F-1 for information required under this Item 8.


ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

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ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of 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"~~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.

~~Management's~~

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements, and provide reasonable assurance as to the detection of fraud.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures based on the framework and criteria established in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission and concluded that our internal control over financial reporting was effective as of January ~~31, 2015.~~28, 2017.

Our independent registered public accounting firm, Deloitte & Touche LLP, with direct access to our Board of Directors through our Audit Committee, has audited the consolidated financial statements we prepared and issued an attestation report on the effectiveness of our internal control over financial reporting. The report appears in the Consolidated Financial Statements section of this Form10-K.

Changes in Internal Control over Financial Reporting

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the internal control over financial reporting and concluded that no change in our internal control over financial reporting occurred during the fourth quarter ended January ~~31, 2015~~28, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

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PART III


ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following information pertains to our executive officers as of March ~~24, 2015:~~21, 2017:



Name	Age	Position
Michael L. Glazer	6668	President and Chief Executive Officer, Director
~~Steven P. Lawrence~~Thorsten I. Weber	4746	Executive Vice President, Chief Merchandising Officer
William E. Gentner	4648	Executive Vice President, Chief Marketing Officer
Steven L. Hunter	4446	Executive Vice President, Chief Information Officer
Russell A. Lundy, II	5254	Executive Vice President, Chief Stores Officer
~~Stephen B. Parsons~~	50	~~Executive Vice President, Chief Human Resources Officer~~
Oded Shein	5355	Executive Vice President, Chief Financial Officer and Treasurer
Chadwick P. Reynolds	4143	Senior Vice President, Chief Legal Officer and Secretary
Richard E. Stasyszen	5456	Senior Vice President, Finance and Controller

Mr. Glazer joined us in April 2012 as President and Chief Executive Officer. He has served as a member of our Board since August 2001. Mr. Glazer served as the President and CEO of Mattress Giant Corporation from October 2009 to April 2012.

Mr. ~~Lawrence~~Weber joined us in ~~April 2012~~July 2013 as Senior Vice President, Planning and Allocation and was promoted to Executive Vice President, Chief ~~Merchandising Officer.~~Merchandise Officer in September 2016. Most recently, he served as Senior Vice President, Planning and Allocation with Kohl’s Corporation. Previously, he spent 1110 years with J.C. Penney Company, Inc., where he ~~was most recently Co-Chief Merchant EVP GMM Men's, Kids & Home.~~ultimately held the position of Senior Vice President, Planning and Allocation. Prior to joining J.C. Penney ~~Mr. Lawrence~~Company, Inc., he spent 119 years at the ~~former Foley's~~Kaufmann’s Division of May Department Stores Company where he began his career and held ~~various merchandising~~buying positions of increasing responsibility.

Mr. Gentner joined us in June 2012 as Senior Vice President, Marketing and was promoted to Executive Vice President, Chief Marketing Officer in June 2014. From June 2007 to June 2012, he served in various marketing positions at J.C. Penney Company, Inc., including Senior Vice President, Strategic Brands and Senior Vice President, Marketing Planning and Promotions.

Mr. Hunter joined us in June 2008 as Senior Vice President, Chief Information Officer and was promoted to Executive Vice President, Chief Information Officer in March 2010. From May 2003 to June 2008, he served as Senior Vice President of Information Technology at Belk, Inc.

Mr. Lundy joined us in November 2003 as Senior Vice President, Stores, was promoted to Executive Vice President, Stores in January 2013, and to Executive Vice President, Chief Stores Officer in October 2014. Prior to joining us, he spent 27 years with Peebles, Inc.

Mr. Parsons joined us in April 2014 as Executive Vice President, Chief Human Resources Officer. From July 2011 to December 2013, he served as Chief Human Resources Officer of OfficeMax Incorporated. Prior to joining OfficeMax, Mr. Parsons served from June 2007 to July 2011 as the Senior Vice President - Human Resources & Labor Relations of Rite Aid Corporation.

~~Mr.~~ Shein joined us in January 2011 as Executive Vice President, Chief Financial Officer. From July 2004 to January 2011, he served in various financial positions at Belk, Inc., including Vice President, Finance and Vice President and Treasurer. Prior to joining Belk, Inc., Mr. Shein served as the Vice President, Treasurer of Charming Shoppes, Inc.

Mr. Reynolds joined us in August 2014 as Senior Vice President, Chief Legal Officer and Secretary. Previously, he spent 16 years with Big Lots, Inc., where he most recently served as Vice President, Deputy General Counsel and Assistant Corporate Secretary from March 2009 to August 2014.

Mr. Stasyszen joined us in March 1998 as Assistant Controller and was promoted to Vice President and Controller in February 1999. In July 2001, he was promoted to Senior Vice President, Finance and Controller.

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The remaining information called for by this item, including with respect to our directors, shareholder nomination procedures, code of ethics, Audit Committee, audit committee financial experts, and Section 16(a) beneficial ownership reporting compliance, is incorporated herein by reference ~~"Item~~“Item 1: Election of Directors,~~" "Governance," "Security~~” “Governance,” “Security Ownership of Certain Beneficial Owners and ~~Management"~~Management” and ~~"Section~~“Section 16(a) Beneficial Ownership Reporting ~~Compliance"~~Compliance” in the Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

Information regarding executive compensation, Compensation Committee interlocks and insider participation, director compensation, and the Compensation Committee Report called for by this item is incorporated herein by reference to ~~"Governance," "Compensation~~“Governance,” “Compensation Committee Interlocks and Insider Participation,~~" "Executive~~” “Executive Compensation,~~" "Director Compensation"~~” “Director Compensation” and ~~"Compensation~~“Compensation Committee ~~Report"~~Report” in the Proxy Statement.


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding the security ownership of certain beneficial owners and management and related stockholder matters called for by this item is incorporated herein by reference to ~~"Security~~“Security Ownership of Certain Beneficial Owners and ~~Management"~~Management” in the Proxy Statement. The remaining information called for by this item is incorporated by reference to ~~"Equity~~“Equity Compensation Plan ~~Information"~~Information” in the Proxy Statement.


ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding our review of director independence and transactions with related persons called for by this item is incorporated herein by reference to ~~"Item~~“Item 1: Election of Directors,~~" "Governance"~~” “Governance” and ~~"Transactions~~“Transactions with Related ~~Persons"~~Persons” in the Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding fees billed to us by our independent registered public accounting firm, Deloitte & Touche LLP, and our Audit ~~Committee's~~Committee’s pre-approval policies and procedures called for by this item is incorporated herein by reference to ~~"Audit~~“Audit Committee ~~Matters"~~Matters” in the Proxy Statement.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(a)	Documents filed as part of this report:

1. Financial Statements:

See ~~"Index~~“Index to Consolidated Financial Statements of Stage Stores, Inc."” on page F-1, the Report of Independent Registered Public Accounting Firm on page F-2, and the Financial Statements on pages F-3 to ~~F-30,~~F-29, of this Form 10-K, all of which are incorporated herein by reference.

2. Financial Statement Schedules:

All schedules are omitted because they are not applicable or not required or because the required information is shown in the Consolidated Financial Statements or Notes thereto on pages F-3 to ~~F-30,~~F-29, which are incorporated herein by reference.

3. Exhibits Index:

The following documents are the exhibits to this Form 10-K. Copies of exhibits will be furnished upon written request and payment of our reasonable expenses in furnishing the exhibits.

Exhibit

Number Description



3.1	Amended and Restated Articles of Incorporation of Stage Stores, Inc. dated June 7, 2007 are incorporated by reference to Exhibit 3.1 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 12, 2007.



3.2	Amended and Restated ~~By-Laws~~Bylaws of Stage Stores, Inc. dated ~~March 28, 2007~~September 15, 2016 are incorporated by reference to Exhibit ~~3.3~~3 to ~~Stage Stores' Annual~~our Quarterly Report on Form ~~10-K (Commission File No. 1-14035)~~10-Q filed ~~April 3, 2007.~~

on December 8, 2016.

4.1	Form of Common Stock Certificate of Stage Stores, Inc. is incorporated by reference to Exhibit 4.1 to ~~Stage Stores'~~our Registration Statement on Form 10 ~~(Commission File No. 000-21011)~~ filed on October 29, 2001.



10.1	Second Amended and Restated Credit Agreement dated October 6, 2014, among Specialty Retailers, Inc., as borrower, Stage Stores, Inc., as guarantor, and the banks named therein is incorporated by reference to Exhibit 10.1 to ~~Stage Stores’~~our Current Report on Form 8-K ~~(Commission File No. 1-14035)~~ filed on October 10, 2014. Some schedules to this Exhibit have been omitted. The registrant agrees to furnish supplementally a copy of any of the omitted schedules to this Exhibit to the Securities and Exchange Commission upon its request.



~~10.2†~~ 10.2	First Amendment to Second Amended and Restated Credit Agreement dated December 16, 2016, among Specialty Retailers, Inc., as borrower, Stage Stores, Inc., as guarantor, and the banks named therein is incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on December 19, 2016. Some schedules to this Exhibit have been omitted. The registrant agrees to furnish supplementally a copy of any of the omitted schedules to this Exhibit to the Securities and Exchange Commission upon its request.

10.3†	Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan effective June 3, 2004 is incorporated by reference to Exhibit 10.1 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.3†~~ 10.4†	Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan effective June 9, 2011 is incorporated by reference to Exhibit 10.2 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.4†~~ 10.5†	Stage Stores, Inc. Amended and Restated 2003 Non-Employee Director Equity Compensation Plan effective June 10, 2014 is incorporated by reference to Exhibit 10.2 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 11, 2014.



~~10.5†~~ 10.6†	Form of Stock Appreciation Rights Agreement (Employee) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan is incorporated by reference to Exhibit 10.4 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 6, 2012.



~~10.6†~~	Form of Stock Appreciation Rights Agreement (Employee) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan is incorporated by reference to Exhibit 10.5 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



10.7†	Form of Performance Based Share Agreement under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan is incorporated by reference to Exhibit 10.6 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 6, 2012.



~~10.8†~~	Form of Performance Based Share Agreement under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan is incorporated by reference to Exhibit 10.7 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.9†~~ 10.8†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan (prior to 2012; cliff vesting; all employees) is incorporated by reference to Exhibit 10.8 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 6, 2012.



~~10.10†~~	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan (4 year pro rata vesting; SVPs and above) is incorporated by reference to Exhibit 10.9 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.11†~~ 10.9†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan (4 year pro rata vesting; below SVP level) is incorporated by reference to Exhibit 10.10 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.12†~~ 10.10†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan (4 year pro rata vesting; EVPs and above; with non-compete) is incorporated by reference to Exhibit 10.11 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.13†~~ 10.11†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan (cliff vesting; all employees) is incorporated by reference to Exhibit 10.12 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.14†~~ 10.12†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan (4 year pro rata vesting; SVPs and above) is incorporated by reference to Exhibit 10.13 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.15†~~ 10.13†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan (4 year pro rata vesting; below SVP level) is incorporated by reference to Exhibit 10.14 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.16†~~ 10.14†	Form of Restricted Stock Award Agreement (Employee) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan (4 year pro rata vesting; EVPs and above; with non-compete) is incorporated by reference to Exhibit 10.15 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.17†~~ 10.15†	Form of Nonstatutory Stock Option Agreement (Employee) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan is incorporated by reference to Exhibit 10.16 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 6, 2012.



~~10.18†~~	Form of Nonstatutory Stock Option Agreement (Employee) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan is incorporated by reference to Exhibit 10.17 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 6, 2012.



~~10.19†~~	Form of Nonstatutory Stock Option Agreement (Director) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan is incorporated by reference to Exhibit 10.18 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 6, 2012.



~~10.20†~~	Form of Initial Grant Restricted Stock Award Agreement (Director) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan is incorporated by reference to Exhibit 10.3 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 11, 2014.



~~10.21†~~	Form of Initial Grant Restricted Stock Award Agreement (Director) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan is incorporated by reference to Exhibit 10.4 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 11, 2014.



~~10.22†~~ 10.16†	Form of Reelection Grant Restricted Stock Award Agreement (Director) under the Stage Stores, Inc. Amended and Restated 2001 Equity Incentive Plan is incorporated by reference to Exhibit 10.5 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed September 11, 2014.



~~10.23†~~	Form of Reelection Grant Restricted Stock Award Agreement (Director) under the Stage Stores, Inc. Second Amended and Restated 2008 Equity Incentive Plan is incorporated by reference to Exhibit 10.6 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 11, 2014.



~~10.24†~~ 10.17†	Form of Shareholder Agreement for restricted stock (Director) under the Stage Stores, Inc. Amended and Restated 2003 Non-Employee Director Equity Compensation Plan is incorporated by reference to Exhibit 10.7 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 11, 2014.



~~10.25†~~ 10.18†	Stage Stores Executive Performance Incentive Bonus Plan is incorporated by reference to Exhibit 10 to our Current Report on Form 8-K filed on June 16, 2015.

10.19†	Stage Stores, Inc. Nonqualified Deferred Compensation Plan, as Amended and Restated effective June 5, 2008 is incorporated by reference to Exhibit 4.4 to ~~Stage Stores'~~our Registration Statement on Form S-8 ~~(Commission File No. 333-151568)~~ filed on June 10, 2008.



~~10.26#~~ 10.20#	Amended and Restated Private Label Credit Card Plan Agreement Between World Financial Network Bank (now Comenity Bank) and Stage Stores, Inc. and Specialty Retailers, Inc. dated as of August 8, 2012 is incorporated by reference to Exhibit 10.1 to ~~Stage Stores'~~our Amended Quarterly Report on Form 10-Q/A ~~(Commission File No. 1-14035)~~ filed on March 7, 2013.



~~10.27#~~ 10.21#	Amendment No. One to Amended and Restated Private Label Credit Card Plan Agreement dated as of February 1, 2013, Between World Financial Network Bank (now Comenity Bank) and Stage Stores, Inc. and Specialty Retailers, Inc. is incorporated by reference to Exhibit 10.26 to ~~Stage Stores'~~our Annual Report on Form 10-K ~~(Commission File No. 1-14035)~~ filed on April 3, 2013.



~~10.28#~~ 10.22#	Amendment No. Two to Amended and Restated Private Label Credit Card Plan Agreement dated as of February 13, 2014, Between ~~World Financial Network~~Comenity Bank ~~(now Comenity Bank)~~ and Stage Stores, Inc. and Specialty Retailers, Inc. is incorporated by reference to Exhibit 10.1 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on June 10, 2014.



~~10.29#~~ 10.23#	Amendment No. Three to Amended and Restated Private Label Credit Card Plan Agreement dated as of May 4, 2014, Between Comenity Bank and Stage Stores, Inc. and Specialty Retailers, Inc. is incorporated by reference to Exhibit 10.1 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 11, 2014.



~~10.30†~~ 10.24#	Amendment No. Four to Amended and Restated Private Label Credit Card Plan Agreement dated as of March 28, 2016, Between Comenity Bank and Stage Stores, Inc. and Specialty Retailers, Inc. is incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on June 3, 2016.

10.25†	Employment Agreement between Oded Shein and Stage Stores, Inc. dated ~~January 10, 2011~~June 16, 2015 is incorporated by reference to Exhibit ~~10.4~~10.1 of ~~Stage Stores' Quarterly~~our Current Report on Form ~~10-Q (Commission File No. 1-14035)~~8-K filed on June ~~9, 2011.~~

22, 2015.

~~10.31†~~ 10.26†	Employment Agreement between Steven L. Hunter and Stage Stores, Inc. dated April ~~11, 2011~~1, 2015 is incorporated by reference to Exhibit ~~10.5~~10.1 Stage ~~Stores' Quarterly~~Stores’ Current Report on Form ~~10-Q (Commission File No. 1-14035)~~8-K filed ~~June 9, 2011.~~

on April 7, 2015.

~~10.32†~~ 10.27†	Employment Agreement between Michael L. Glazer and Stage Stores, Inc. dated June 12, 2012 is incorporated by reference to Exhibit 10.25 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 6, 2012.



~~10.33†~~ 10.28†	Employment Agreement between ~~Steven Lawrence~~Thorsten I. Weber and Stage Stores, Inc. dated ~~July 23, 2012~~September 29, 2016 is incorporated by reference to Exhibit ~~10.3~~10.1 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed ~~June 13, 2013.~~

on December 8, 2016.

~~10.34†~~ 10.29†	Employment Agreement between Russ Lundy and Stage Stores, Inc. dated August 6, 2010 is incorporated by reference to Exhibit 10.2 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on June 13, 2013.



~~10.35†~~ 10.30†	Employment Agreement between Stephen Parsons and Stage Stores, Inc. dated April 28, 2014 is incorporated by reference to Exhibit 10.2 to Stage Stores' Quarterly Report on Form 10-Q (Commission File No. 1-14035) filed June 10, 2014.



~~10.36†~~	Employment Agreement between Bill Gentner and Stage Stores, Inc. dated June 17, 2014 is incorporated by reference to Exhibit 10.8 to ~~Stage Stores'~~our Quarterly Report on Form 10-Q ~~(Commission File No. 1-14035)~~ filed on September 11, 2014.



14 10.31†	Form of Indemnity Agreement is incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on December 8, 2016.

14	Code of Ethics for Senior Officers dated January 25, 2011 is incorporated by reference to Exhibit 14 to ~~Stage Stores'~~our Annual Report to Form 10-K ~~(Commission File No. 1-14035)~~ filed on March 30, 2011.



21*	Subsidiaries of Stage Stores, Inc.



23*	Consent of Independent Registered Public Accounting Firm.



24.1*	Power of Attorney: Directors (Form 10-K).



24.2*	Power of Attorney: Section 16 Filers.



31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32*	Certification of Chief Executive Officer and Chief Financial Officer 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.


†	Management contract or compensatory plan or arrangement.


#	Certain confidential portions have been omitted pursuant to a confidential treatment request that has been filed separately with the Securities and Exchange Commission.

ITEM 16.FORM 10-K SUMMARY

~~Table~~

An optional summary of ~~Contents~~the information required by this Form 10-K is not included in this Form 10-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

/s/ Michael L. Glazer	April ~~1, 2015~~3, 2017
Michael L. Glazer
President and Chief Executive Officer
(Principal Executive Officer)

STAGE STORES, INC.

/s/ Oded Shein	April ~~1, 2015~~3, 2017
Oded Shein
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)

STAGE STORES, INC.

/s/ Richard E. Stasyszen	April ~~1, 2015~~3, 2017
Richard E. Stasyszen
Senior Vice President, Finance and Controller
(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



*	Director	April ~~1, 2015~~3, 2017	*		Director	April ~~1, 2015~~3, 2017
Alan J. Barocas			~~Earl J. Hesterberg~~

*	~~Director~~	~~April 1, 2015~~	*		~~Director~~	~~April 1, 2015~~
~~Elaine D. Crowley~~			Lisa R. Kranc

*	Director	April ~~1, 2015~~3, 2017	*		Director	April ~~1, 2015~~3, 2017
~~Diane M. Ellis~~Elaine D. Crowley			William J. Montgoris

~~/s/ Michael L. Glazer~~*	Director	April ~~1, 2015~~3, 2017	*		Director	April ~~1, 2015~~3, 2017
~~Michael L. Glazer~~Diane M. Ellis			C. Clayton Reasor

*/s/ Michael L. Glazer	Director	April ~~1, 2015~~3, 2017	*		Director	April ~~1, 2015~~3, 2017
~~Gabrielle E. Greene-Sulzberger~~Michael L. Glazer			Ralph P. Scozzafava

*	Director	April 3, 2017
Earl J. Hesterberg




			(Constituting a majority of the Board of Directors)

				*By:	/s/ Oded Shein
					Oded Shein
					Attorney-in-Fact

~~Table of Contents~~



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF STAGE STORES, INC.

		Page

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets at January ~~31, 2015~~28, 2017 and ~~February 1, 2014~~January 30, 2016		F-3

Consolidated Statements of Operations and Comprehensive Income (Loss) for ~~2014, 2013~~2016, 2015 and ~~2012~~2014		F-4

Consolidated Statements of Cash Flows for ~~2014, 2013~~2016, 2015 and ~~2012~~2014		F-5

Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity for ~~2014, 2013~~2016, 2015 and ~~2012~~2014		F-6

Notes to Consolidated Financial Statements		F-7

~~F-1~~

~~Table of Contents~~

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Stage Stores, Inc.

Houston, Texas

We have audited the accompanying consolidated balance sheets of Stage Stores, Inc. and subsidiary (the ~~"Company"~~“Company”) as of January ~~31, 2015~~28, 2017 and ~~February 1, 2014,~~January 30, 2016, and the related consolidated statements of ~~income,~~operations, comprehensive income ~~stockholders'~~(loss), stockholders’ equity, and cash flows for each of the three years in the period ended January ~~31, 2015.~~28, 2017. We also have audited the ~~Company's~~Company’s internal control over financial reporting as of January ~~31, 2015,~~28, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The ~~Company's~~Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the ~~Company's~~Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A ~~company's~~company’s internal control over financial reporting is a process designed by, or under the supervision of, the ~~company's~~company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the ~~company's~~company’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. A ~~company's~~company’s internal control over financial reporting 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 company; (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 company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~company's~~company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Stage Stores, Inc. and subsidiary as of January ~~31, 2015~~28, 2017 and ~~February 1, 2014,~~January 30, 2016, and the results of their operations and their cash flows for each of the three years in the period ended January ~~31, 2015,~~28, 2017, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January ~~31, 2015,~~28, 2017, based on the criteria established in Internal Control - Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

April ~~1, 2015~~3, 2017

~~F-2~~

~~Table of Contents~~

													Stage Stores, Inc.	Consolidated Balance Sheets	(in thousands, except par value)

	January 31, 2015			February 1, 2014			January 28, 2017			January 30, 2016
ASSETS
Cash and cash equivalents	$	17,165		$	14,762		$	13,803		$	16,487
Merchandise inventories, net	441,452			434,407			409,384			435,996
Prepaid expenses and other current assets	45,444			40,082			41,574			48,279
Total current assets	504,061			489,251			464,761			500,762

Property, equipment and leasehold improvements, net	285,450			282,534			284,110			311,717
Intangible asset	14,910			14,910
Intangible assets							15,235			15,235
Other non-current assets, net	20,256			24,142			22,883			20,385
Total assets	$	824,677		$	810,837		$	786,989		$	848,099
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	121,778		$	125,707		$	101,985		$	84,019
Income taxes payable	13,455			5,345			326			1,850
Current portion of debt obligations	1,715			2,354			6,414			2,847
Accrued expenses and other current liabilities	67,834			61,850			59,945			67,166
Total current liabilities	204,782			195,256			168,670			155,882

Long-term debt obligations	45,673			60,871			163,749			162,876
Deferred taxes	20,474			15,644			547			20,277
Other long-term liabilities	77,818			84,622			73,863			79,311
Total liabilities	348,747			356,393			406,829			418,346

Commitments and contingencies
Commitments and contingencies (Note 8)

Common stock, par value $0.01, 100,000 shares authorized, 31,632 and 31,222 shares issued, respectively	316			312
Common stock, par value $0.01, 100,000 shares authorized, 32,340 and 32,030 shares issued, respectively							323			320
Additional paid-in capital	395,395			384,295			410,504			406,034
Less treasury stock - at cost, 0 and 0 shares, respectively	(600		)	(967		)
Less treasury stock at cost, 5,175 shares, respectively							(43,286		)	(43,068		)
Accumulated other comprehensive loss	(6,874		)	(4,616		)	(5,648		)	(6,353		)
Retained earnings	87,693			75,420			18,267			72,820
Total stockholders' equity	475,930			454,444
Total liabilities and stockholders' equity	$	824,677		$	810,837
Total stockholders’ equity							380,160			429,753
Total liabilities and stockholders’ equity							$	786,989		$	848,099

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

~~F-3~~

~~Table of Contents~~

																			Stage Stores, Inc.
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Operations and Comprehensive Income (Loss)										Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except earnings per share)

	Fiscal Year									Fiscal Year
	2014			2013			2012			2016			2015			2014
Net sales	$	1,638,569		$	1,609,481		$	1,627,702		$	1,442,718		$	1,604,433		$	1,638,569
Cost of sales and related buying, occupancy and distribution expenses	1,188,763			1,172,995			1,168,907			1,144,666			1,208,002			1,188,763
Gross profit	449,806			436,486			458,795			298,052			396,431			449,806

Selling, general and administrative expenses	383,616			390,224			387,332			356,064			387,859			386,104
Store opening costs	2,488			2,902			2,163
Interest expense	3,002			2,744			3,011			5,051			2,977			3,002
Income from continuing operations before income tax	60,700			40,616			66,289
Income tax expense	22,847			15,400			24,373
Income from continuing operations	37,853			25,216			41,916
Loss from discontinued operations, net of tax benefit of $4,228, $5,237 and $2,172, respectively	(7,003		)	(8,574		)	(3,737		)
Net income	$	30,850		$	16,642		$	38,179
Income (loss) from continuing operations before income tax										(63,063		)	5,595			60,700
Income tax expense (benefit)										(25,166		)	1,815			22,847
Income (loss) from continuing operations										(37,897		)	3,780			37,853
Loss from discontinued operations, net of tax benefit of $4,228										—			—			(7,003		)
Net income (loss)										$	(37,897	)	$	3,780		$	30,850

Other comprehensive income (loss):
Employee benefit related adjustment, net of tax of ($1,505), $683, ($992), respectively	$	(2,507	)	$	1,138		$	(1,645	)
Amortization of employee benefit related costs, net of tax of $150, $229, and $156, respectively	249			381			258
Employee benefit related adjustment, net of tax of $112, ($258) and ($1,505), respectively										$	189		$	(431	)	$	(2,507	)
Amortization of employee benefit related costs, net of tax of $381, $290, and $150, respectively										516			484			249
Loss on pension settlement, net of tax of $280										—			468			—
Total other comprehensive income (loss)	(2,258		)	1,519			(1,387		)	705			521			(2,258		)
Comprehensive income	$	28,592		$	18,161		$	36,792
Comprehensive income (loss)										$	(37,192	)	$	4,301		$	28,592

Basic earnings per share data:
Basic earnings (loss) per share data:
Continuing operations	$	1.18		$	0.78		$	1.32		$	(1.40	)	$	0.12		$	1.18
Discontinued operations	$	(0.22	)	$	(0.27	)	$	(0.12	)	—			—			(0.22		)
Basic earnings per share	$	0.96		$	0.51		$	1.20
Basic earnings (loss) per share										$	(1.40	)	$	0.12		$	0.96
Basic weighted average shares outstanding	31,675			32,034			31,278			27,090			31,145			31,675

Diluted earnings per share data:
Diluted earnings (loss) per share data:
Continuing operations	$	1.18		$	0.77		$	1.31		$	(1.40	)	$	0.12		$	1.18
Discontinued operations	$	(0.22	)	$	(0.26	)	$	(0.12	)	—			—			(0.22		)
Diluted earnings per share	$	0.96		$	0.51		$	1.19
Diluted earnings (loss) per share										$	(1.40	)	$	0.12		$	0.96
Diluted weighted average shares outstanding	31,763			32,311			31,600			27,090			31,188			31,763

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

~~F-4~~

~~Table of Contents~~

																			Stage Stores, Inc.	Consolidated Statements of Cash Flows	(in thousands)
										Fiscal Year
	Fiscal Year									2016			2015			2014
	2014			2013			2012
Cash flows from operating activities:
Net income	$	30,850		$	16,642		$	38,179
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)										$	(37,897	)	$	3,780		$	30,850
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and impairment of long-lived assets	63,447			69,925			60,426			91,656			77,599			63,447
Loss on retirements of property, equipment and leasehold improvements	110			860			454			296			719			110
Deferred income taxes	3,348			(808		)	1,108			(20,224		)	(2,330		)	3,348
Tax benefit (deficiency) from stock-based compensation	64			1,761			(1,311		)
Tax (deficiency) benefit from stock-based compensation										(4,565		)	409			64
Stock-based compensation expense	9,664			8,417			7,803			9,461			12,394			9,664
Amortization of debt issuance costs	275			279			417			229			218			275
Excess tax benefits from stock-based compensation	(852		)	(2,076		)	(1,024		)	—			(945		)	(852		)
Deferred compensation obligation	(367		)	266			(134		)	218			881			(367		)
Amortization of employee benefit related costs	399			610			414
Amortization of employee benefit related costs and loss on pension settlement										897			1,522			399
Construction allowances from landlords	5,538			4,162			4,193			7,079			3,444			5,538
Other changes in operating assets and liabilities:
Increase in merchandise inventories	(7,045		)	(20,479		)	(65,984		)
Increase in other assets	(1,737		)	(6,375		)	(4,802		)
Decrease (increase) in merchandise inventories										26,612			5,456			(7,045		)
Decrease (increase) in other assets										754			1,551			(1,737		)
Increase (decrease) in accounts payable and other liabilities	(1,480		)	(26,657		)	36,242			9,768			(64,398		)	(1,480		)
Net cash provided by operating activities	102,214			46,527			75,981			84,284			40,300			102,214

Cash flows from investing activities:
Additions to property, equipment and leasehold improvements	(70,580		)	(61,263		)	(49,489		)	(74,257		)	(90,695		)	(70,580		)
Proceeds from insurance and disposal of assets	2,946			27			50			1,179			43			2,946
Addition to intangible assets										—			(325		)	—
Net cash used in investing activities	(67,634		)	(61,236		)	(49,439		)	(73,078		)	(90,977		)	(67,634		)

Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	457,742			494,885			357,910			512,873			575,570			457,742
Payments of revolving credit facility borrowings	(471,227		)	(445,490		)	(376,410		)	(510,011		)	(460,640		)	(471,227		)
Proceeds from long-term debt obligation										5,830			—			—
Payments of long-term debt obligations	(2,352		)	(744		)	(18,674		)	(4,252		)	(1,714		)	(2,352		)
Payments of debt issuance costs	(663		)	(128		)	—			(815		)	—			(663		)
Repurchases of common stock	(2,755		)	(31,367		)	(61		)	—			(41,587		)	(2,755		)
Payments for stock related compensation	(1,844		)	(2,381		)	(326		)	(859		)	(4,465		)	(1,844		)
Proceeds from issuance of equity awards	5,040			10,149			21,306			—			543			5,040
Excess tax benefits from stock-based compensation	852			2,076			1,024			—			945			852
Cash dividends paid	(16,970		)	(15,466		)	(11,995		)	(16,656		)	(18,653		)	(16,970		)
Net cash provided by (used in) financing activities	(32,177		)	11,534			(27,226		)	(13,890		)	49,999			(32,177		)

Net increase (decrease) in cash and cash equivalents	2,403			(3,175		)	(684		)
Net (decrease) increase in cash and cash equivalents										(2,684		)	(678		)	2,403

Cash and cash equivalents:
Beginning of period	14,762			17,937			18,621			16,487			17,165			14,762
End of period	$	17,165		$	14,762		$	17,937		$	13,803		$	16,487		$	17,165

Supplemental disclosures including non-cash investing and financing activities:
Interest paid	$	2,733		$	2,392		$	2,679		$	4,816		$	2,705		$	2,733
Income taxes paid	7,084			18,789			13,674			1,601			15,237			7,084
Unpaid liabilities for capital expenditures	3,168			4,918			5,176			3,943			11,951			3,168

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

~~F-5~~

~~Table of Contents~~

																																																					Stage Stores, Inc.
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Stockholders’ Equity																												Consolidated Statements of Stockholders’ Equity
(in thousands, except per share amounts)

	Common Stock					Additional Paid-in Capital				Treasury Stock							Accumulated Other Comprehensive Loss				Retained Earnings							Common Stock						Additional Paid-in Capital				Treasury Stock					Accumulated Other Comprehensive Loss				Retained Earnings
	Shares		Amount						Shares			Amount								Total				Shares			Amount					Shares		Additional Paid-in Capital			Amount					Total					Retained Earnings
Balance, January 28, 2012	30,444		$	304		Additional Paid-in Capital	$	349,366			—			$	(835	)	Accumulated Other Comprehensive Loss		$	(4,748	Retained Earnings		)		$	68,619			$	412,706

Net income	—		—			—				—			—				—				38,179				38,179
Other comprehensive loss	—		—			—				—			—				(1,387		)		—				(1,387		)
Dividends on common stock, $0.38 per share	—		—			—				—			—				—				(11,995		)		(11,995		)
Deferred compensation	—		—			(134		)		—			134				—				—				—
Repurchases of common stock	—		—			—				(4	)		(61		)		—				—				(61		)
Retirement of treasury stock	(4	)	—			(29		)		4			61				—				(32		)		—
Issuance of equity awards, net	1,574		16			21,290				—			—				—				—				21,306
Tax withholdings paid for net settlement of stock awards	—		—			(460		)		—			—				—				—				(460		)
Stock-based compensation expense	—		—			7,803				—			—				—				—				7,803
Tax deficiency from stock-based compensation	—		—			(1,311		)		—			—				—				—				(1,311		)
Recognition of pre-reorganization deferred tax assets	—		—			90				—			—				—				—				90
Balance, February 2, 2013	32,014		$	320		$	376,615			—			$	(701	)		$	(6,135	)		$	94,771			$	464,870

Net income	—		—			—				—			—				—				16,642				16,642
Other comprehensive income	—		—			—				—			—				1,519				—				1,519
Dividends on common stock, $0.475 per share	—		—			—				—			—				—				(15,466		)		(15,466		)
Deferred compensation	—		—			266				—			(266		)		—				—				—
Repurchases of common stock	—		—			—				(1,626	)		(31,367		)		—				—				(31,367		)
Retirement of treasury stock	(1,626	)	(16		)	(10,824		)		1,626			31,367				—				(20,527		)		—
Issuance of equity awards, net	834		8			10,141				—			—				—				—				10,149
Tax withholdings paid for net settlement of stock awards	—		—			(2,115		)		—			—				—				—				(2,115		)
Stock-based compensation expense	—		—			8,417				—			—				—				—				8,417
Tax benefit from stock-based compensation	—		—			1,761				—			—				—				—				1,761
Recognition of pre-reorganization deferred tax assets	—		—			34				—			—				—				—				34
Balance, February 1, 2014	31,222		$	312		$	384,295			—			$	(967	)		$	(4,616	)		$	75,420			$	454,444		31,222			$	312		$	384,295			—		$	(967	)	Accumulated Other Comprehensive Loss	$	(4,616	)		$	75,420		$	454,444

Net income	—		—			—				—			—				—				30,850				30,850			—			—			—				—		—			—				30,850			30,850
Other comprehensive loss	—		—			—				—			—				(2,258		)		—				(2,258		)	—			—			—				—		—			(2,258		)		—			(2,258		)
Dividends on common stock, $0.53 per share	—		—			—				—			—				—				(16,970		)		(16,970		)	—			—			—				—		—			—				(16,970		)	(16,970		)
Deferred compensation	—		—			(367		)		—			367				—				—				—			—			—			(367		)		—		367			—				—			—
Repurchases of common stock	—		—			—				(172	)		(2,755		)		—				—				(2,755		)	—			—			—				(172	)	(2,755		)	—				—			(2,755		)
Retirement of treasury stock	(172	)	(2		)	(1,146		)		172			2,755								(1,607		)		—			(172	)		(2		)	(1,146		)		172		2,755							(1,607		)	—
Issuance of equity awards, net	582		6			5,034				—			—				—				—				5,040			582			6			5,034				—		—			—				—			5,040
Tax withholdings paid for net settlement of stock awards	—		—			(2,211		)		—			—				—				—				(2,211		)	—			—			(2,211		)		—		—			—				—			(2,211		)
Stock-based compensation expense	—		—			9,664				—			—				—				—				9,664			—			—			9,664				—		—			—				—			9,664
Tax benefit from stock-based compensation	—		—			64				—			—				—				—				64			—			—			64				—		—			—				—			64
Recognition of pre-reorganization deferred tax assets	—		—			62				—			—				—				—				62			—			—			62				—		—			—				—			62
Balance, January 31, 2015	31,632		$	316		$	395,395			—			$	(600	)		$	(6,874	)		$	87,693			$	475,930		31,632			$	316		$	395,395			—		$	(600	)	$	(6,874	)		$	87,693		$	475,930
Net income																												—			—			—				—		—			—				3,780			3,780
Other comprehensive income																												—			—			—				—		—			521				—			521
Dividends on common stock, $0.58 per share																												—			—			—				—		—			—				(18,653		)	(18,653		)
Deferred compensation																												—			—			881				—		(881		)	—				—			—
Repurchases of common stock																												—			—			—				(5,175	)	(41,587		)	—				—			(41,587		)
Issuance of equity awards, net																												398			4			539				—		—			—				—			543
Tax withholdings paid for net settlement of stock awards																												—			—			(3,584		)		—		—			—				—			(3,584		)
Stock-based compensation expense																												—			—			12,394				—		—			—				—			12,394
Tax benefit from stock-based compensation																												—			—			409				—		—			—				—			409
Balance, January 30, 2016																												32,030			$	320		$	406,034			(5,175	)	$	(43,068	)	$	(6,353	)		$	72,820		$	429,753
Net loss																												—			—			—				—		—			—				(37,897		)	(37,897		)
Other comprehensive income																												—			—			—				—		—			705				—			705
Dividends on common stock, $0.60 per share																												—			—			—				—		—			—				(16,656		)	(16,656		)
Deferred compensation																												—			—			218				—		(218		)	—				—			—
Issuance of equity awards, net																												310			3			(3		)		—		—			—				—			—
Tax withholdings paid for net settlement of stock awards																												—			—			(641		)		—		—			—				—			(641		)
Stock-based compensation expense																												—			—			9,461				—		—			—				—			9,461
Tax deficiency from stock-based compensation																												—			—			(4,565		)		—		—			—				—			(4,565		)
Balance, January 28, 2017																												32,340			$	323		$	410,504			(5,175	)	$	(43,286	)	$	(5,648	)		$	18,267		$	380,160

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

~~F-6~~

~~Table of Contents~~

Stage Stores, Inc.

Notes to Consolidated Financial Statements

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business. We are a retailer operating specialty department stores primarily in small and mid-sized towns and communities. Our merchandise assortment is a well-edited selection of moderately priced brand name and private label apparel, accessories, cosmetics, footwear and home goods. As of January ~~31, 2015,~~28, 2017, we operated ~~854~~798 specialty department stores located in 4038 states under the BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and a direct-to-consumer business.

Principles of Consolidation. The consolidated financial statements include the accounts of Stage Stores, Inc. and its subsidiary. All intercompany transactions have been eliminated in consolidation. We report our specialty department stores and e-commerce website in a single operating segment. Revenues from customers are derived from merchandise sales. We do not rely on any major customer as a source of revenue.

Fiscal Year. 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.


Fiscal Year	Ended	Weeks	Ended	Weeks
2016			January 28, 2017	52
2015			January 30, 2016	52
2014	January 31, 2015	52	January 31, 2015	52
2013	February 1, 2014	52
2012	February 2, 2013	53

Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to inventory, deferred tax assets, intangible ~~asset,~~assets, long-lived assets, sales returns, gift card breakage, pension obligations, self-insurance and contingent liabilities. Actual results may differ materially from these estimates. We base our estimates on historical experience and on various assumptions which are believed to be reasonable under the circumstances.

Cash and Cash Equivalents. We consider highly liquid investments with initial maturities of less than three months to be cash equivalents. Cash and cash equivalents also includes amounts due from credit card sales transactions.

Concentration of Credit Risk. Financial instruments which potentially subject us to concentrations of credit risk are primarily cash. Our cash management and investment policies restrict investments to low-risk, highly-liquid securities and we perform periodic evaluations of the relative credit standing of the financial institutions with which we deal.

Merchandise Inventories. We value merchandise inventories using the lower of cost or ~~market~~net realizable value with cost determined using the weighted average cost method. We capitalize distribution center costs associated with preparing inventory for sale, such as distribution payroll, benefits, occupancy, depreciation and other direct operating expenses as part of merchandise inventories. We also include in inventory the cost of freight to our distribution centers and to stores as well as duties and fees related to import purchases.

Stage Stores, Inc.

Notes to Consolidated Financial Statements – (continued)

Vendor Allowances. We receive consideration from our merchandise vendors in the form of allowances and reimbursements. Given the promotional nature of our business, the allowances are generally intended to offset our costs of handling, promoting, advertising and selling the ~~vendors'~~vendors’ products in our stores. These allowances are recognized in accordance with ASC Subtopic 605-50, Customer Payments and Incentives. Vendor allowances related to the purchase of inventory are recorded as a reduction to the cost of inventory until sold. Vendor allowances are recognized as a reduction of cost of goods sold or the related selling expense when the purpose for which the vendor funds were intended to be used has been fulfilled and amounts have been authorized by vendors. As part our South Hill Consolidation (see Note 16), we changed the method of collecting advertising allowances from our vendors resulting in a reduction in the amount of these allowances considered as a reimbursement for specific, incremental, identifiable costs incurred to sell vendors' products. Accordingly, beginning in 2013, the majority of advertising allowances are recorded as a reduction to the cost of merchandise purchases.

~~F-7~~

~~Table of Contents~~

~~Stage Stores, Inc.~~

~~Notes to Consolidated Financial Statements – (continued)~~

Stock-Based Compensation. We recognize as compensation expense an amount equal to the fair value of share-based payments granted to employees and independent directors, net of estimated forfeitures. That cost is recognized ratably in SG&A expense over the period during which an employee or independent director is required to provide service in exchange for the award.

Property, Equipment and Leasehold Improvements. Additions to property, equipment and leasehold improvements are recorded at cost and depreciated over their estimated useful lives using the straight-line method. The estimated useful lives of leasehold improvements do not exceed the term of the related lease, including applicable available renewal options where appropriate. The estimated useful lives in years are generally as follows:


Buildings & improvements	20			20
Information systems				3	-	10
Store and office fixtures and equipment	5	-	10	5	-	10
Warehouse equipment	5	-	15	5	-	15
Leasehold improvements - stores	5	-	15	5	-	15
Leasehold improvements - corporate office	10	-	20	10	-	12

Impairment of Long-Lived Assets. Property, plant and equipment and other long-lived assets are reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. For long-lived assets to be held and used, we base our evaluation on impairment indicators such as the nature of the ~~asset's~~asset’s physical condition, the future economic benefit of the asset, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate the carrying amount of the asset may not be recoverable, we determine whether impairment has occurred through the use of an undiscounted cash flows analysis of the asset at the lowest level for which identifiable cash flows exist. If impairment has occurred, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. ~~Management's~~Management’s judgment is necessary to estimate fair value.

Insurance Recoveries. We incurred casualty losses during 2016, 2015 and 2014. We received total insurance proceeds of $3.3 million, $2.5 million and $2.0 million during 2016, 2015 and 2014, respectively, and recognized net gains of $0.7 million, $0.8 million and $0.9 million in 2016, 2015 and 2014, respectively, which are included in SG&A expenses.

Intangible ~~Asset~~Assets and Impairment of Intangible Assets. Indefinite life intangible assets are tested for impairment annually or more frequently when indicators of impairment exist. As a part of the acquisition of Peebles, Inc. in 2003, we acquired the rights to the PEEBLES trade name and trademark (collectively the ~~"Trademark"~~“Trademark”), which was identified as an indefinite life intangible. The value of the Trademark was determined to be $14.9 million at the time of the Peebles, Inc. acquisition. ~~Indefinite life intangible assets are not amortized but are tested for impairment annually or more frequently when indicators of impairment exist.~~ We completed our annual impairment ~~test~~testing during the fourth quarter of ~~2014~~2016 and determined ~~there was no impairment.~~that the fair value exceeded the carrying value by less than 10%.

~~Insurance Recoveries.~~ We incurred casualty losses during 2014, 2013 and 2012. We received total insurance proceeds of $2.0 million, $0.7 million and $0.1 million during 2014, 2013 and 2012, respectively, and recognized a net gain of $0.9 million in 2014, a net gain of $0.2 million in 2013 and a net loss of $0.5 million in 2012, which are included in SG&A expenses.

Debt Issuance Costs. Debt issuance costs are accounted for as a deferred charge and amortized on a straight-line basis over the term of the related financing agreement. The balance of debt issuance costs, net of accumulated amortization of $0.1 million and ~~$0.7~~$0.3 million, is ~~$1.0~~$1.4 million and ~~$0.7~~$0.8 million at January ~~31, 2015~~28, 2017 and ~~February 1, 2014,~~January 30, 2016, respectively.

Revenue Recognition. Our retail stores record revenue at the point of sale. Sales ~~from~~of merchandise shipped to our ~~e-commerce website~~customers are recorded atbased on estimated receipt of merchandise by the ~~time of shipment.~~customer. Shipping and handling fees charged to customers are included in net sales with the corresponding costs recorded as costs of goods sold. Total revenues do not include sales tax because we are a pass-through conduit for collecting and remitting sales taxes. Revenues are recognized net of expected returns, which we estimate using historical return patterns as a percentage of sales.

We record deferred revenue on our balance sheet for the sale of gift cards and ~~recognize this revenue upon the redemption of gift cards in net sales. We similarly record deferred revenue on our balance sheet for~~ merchandise credits issued related to customer ~~returns and~~returns. Upon redemption, we recognize this revenue ~~upon the redemption of the merchandise credits.~~ in net sales.

~~Table of Contents~~

~~Stage Stores, Inc.~~

~~Notes to Consolidated Financial Statements – (continued)~~

Gift Card and Merchandise Credit Liability. Unredeemed gift cards and merchandise credits are recorded as a liability. Our gift cards and merchandise credits do not expire. Based on historical redemption rates, a small and relatively stable percentage of gift cards and merchandise credits will never be redeemed, which is referred to as ~~"breakage."~~“breakage.” Estimated breakage income is recognized over time in proportion to actual gift card and merchandise credit redemptions. We recognized breakage income of approximately $3.0 million in net sales in 2016, and approximately $1.6 million and $1.1 million ~~$1.0 million and $1.0 million of breakage income in 2014, 2013 and 2012, respectively, which is recorded~~ as an offset to SG&A ~~expenses.~~expenses in 2015 and 2014, respectively.

Customer Loyalty Program. ~~Customers~~Prior to the third quarter of 2016, customers who ~~spend~~spent a required amount within a specified time frame using our private label credit card ~~receive~~received reward certificates which ~~can~~could be redeemed for merchandise. We ~~estimate~~estimated the net cost of the rewards and ~~record~~recorded a liability associated with unredeemed certificates and customer spend toward unissued certificates. The cost of the loyalty rewards program ~~benefit is~~was recorded in cost of sales. In the third quarter of 2016, we expanded our loyalty program to enable all customers to earn benefits regardless of how they choose to pay. We record deferred revenue, net of estimated breakage, for the retail value of certificates earned and as customers make purchases towards earning reward certificates.

~~Store Opening Expenses.~~Self-Insurance Reserves. ~~Costs related~~We maintain self-insured retentions with respect to general liability, workers compensation and health benefits for our employees. We estimate the ~~opening~~accruals for the liabilities based on industry development factors and historical claim trend experience. Although management believes adequate reserves have been provided for expected liabilities arising from our self-insured obligations, projections of ~~new stores~~future losses are inherently uncertain, and it is reasonably possible that estimates of these liabilities will change over the ~~relocation or rebranding of current stores to a new nameplate are expensed~~near term as ~~incurred. Store opening expenses include the rent incurred during the rent holiday period on new and relocated stores.~~circumstances develop.

Advertising Expenses. Advertising costs are charged to operations when the related advertising first takes place. Advertising costs were $88.7 million, $91.0 million and $92.1 million, ~~$94.2 million~~in 2016, 2015 and ~~$74.7 million, for~~ 2014, ~~2013 and 2012,~~ respectively, which are net of advertising allowances received from vendors of ~~$5.0~~$4.3 million, ~~$5.2~~$4.9 million and ~~$17.1~~$5.0 million, respectively.

Rent Expense. We record rent expense on a straight-line basis over the lease term, including the build out period, and where appropriate, applicable available lease renewal option periods. The difference between the payment and expense in any period is recorded as deferred rent in other long-term liabilities in the consolidated financial statements. We record construction allowances from landlords when contractually earned as a deferred rent credit in other long-term liabilities. Such deferred rent credit is amortized over the related lease term, ~~of the lease,~~ commencing on the date we contractually earned the construction allowance, as a reduction of rent expense. The deferred rent credit was ~~$45.1~~$43.4 million and ~~$49.4~~$47.5 million as of January ~~31, 2015~~28, 2017 and ~~February 1, 2014,~~January 30, 2016, respectively.

Income Taxes. The provision for income taxes is computed based on the pretax income (loss) included in the consolidated financial statements. The asset and liability approach is used to recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts for financial reporting purposes and the tax basis of assets and liabilities. A valuation allowance is established if it is more likely than not that some portion of the deferred tax asset will not be realized. See Note 14 for additional disclosures regarding income taxes and deferred income taxes.

Earnings Per Share. Basic earnings per share is computed using the weighted average number of common shares outstanding during the measurement period. Diluted earnings per share is computed using the weighted average number of common shares as well as all potentially dilutive common share equivalents outstanding during the measurement period. ~~Stock options, SARs and non-vested stock grants were the only potentially dilutive share equivalents we had outstanding at January 31, 2015.~~

We granted non-vested stock awards that contain non-forfeitable ~~rights to dividends.~~dividend rights. Under Accounting Standards Codification ~~("ASC"~~(“ASC”) 260-10, Earnings Per Share, non-vested stock awards that contain non-forfeitable ~~rights to dividends~~dividend or dividend ~~equivalents~~equivalent rights are considered participating securities and are included in the calculation of basic and diluted earnings per share pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. See Note 2 for additional disclosures regarding earnings per share.

~~Table of Contents~~

~~Stage Stores, Inc.~~

~~Notes to Consolidated Financial Statements – (continued)~~

Recent Accounting Standards. ~~In April 2014, the FASB issued ASU No. 2014-08,~~ ~~Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity~~, which changes the criteria for reporting discontinued operations and also requires additional disclosures about discontinued operations. For public companies, the standard is effective prospectively for disposals that occur on or after December 15, 2014, and interim periods within those years, with early adoption permitted. We did not early adopt this ASU.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ~~(Topic 606)~~, which ~~provides a five-step analysis of transactions to determine when and how~~supersedes most existing revenue ~~is recognized.~~recognition guidance in GAAP. The core principle of the guidance is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects what a company expects to be entitled to in exchange for those goods or services. ~~This update~~ASU 2014-09 allows for either a retrospective or cumulative effect transition method of adoption. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year. The new revenue standard will be effective for us ~~retrospectively~~ in the first quarter of ~~2017 with early~~fiscal year ending February 2, 2019. We do not expect the adoption ~~not permitted.~~of ASU 2014-09 to have a material impact on our consolidated financial statements.



NEVADA (State or Other Jurisdiction of Incorporation or Organization)	91-1826900 (I.R.S. Employer Identification No.)

~~10201 MAIN STREET,~~2425 WEST LOOP SOUTH, HOUSTON, TEXAS (Address of Principal Executive Offices)	~~77025~~77027 (Zip Code)



TABLE OF CONTENTS

PART I		Page

Item 1.	Business	4
Item 1A.	Risk Factors	911
Item 1B.	Unresolved Staff Comments	1316
Item 2.	Properties	1417
Item 3.	Legal Proceedings	1518
Item 4.	Mine Safety Disclosures	1518

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1519
Item 6.	Selected Financial Data	1822
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2126
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	3339
Item 8.	Financial Statements and Supplementary Data	3339
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	3339
Item 9A.	Controls and Procedures	3439
Item 9B.	Other Information	3440

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	3541
Item 11.	Executive Compensation	3642
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	3642
Item 13.	Certain Relationships and Related Transactions, and Director Independence	3642
Item 14.	Principal Accountant Fees and Services	3642

PART IV

Item 15.	Exhibits and Financial Statement Schedules	3743

Item 16.	Form 10-K Summary	46

Signatures		4147

Index to Consolidated Financial Statements of Stage Stores, Inc.		F-1

													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)		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)

November 2, 2014 to November 29, 2014	174,187	$	16.04	—	$	99,938,428
October 30, 2016 to November 26, 2016							5,481	$	4.78	—	$	58,351,202

November 30, 2014 to January 3, 2015	1,579	19.82		—	99,938,428
November 27, 2016 to December 31, 2016							9,194	4.71		—	58,351,202

January 4, 2015 to January 31, 2015	1,264	21.67		—	99,938,428
January 1, 2017 to January 28, 2017							2,710	3.59		—	58,351,202

Total	177,030	$	16.11	—			17,385	$	4.56	—


	January 31, 2015								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)		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)	$	16,654	$	16,654	$	—	$	—	$	18,094	$	18,094	$	—	$	—


	February 1, 2014								January 30, 2016
	Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		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)	$	21,023	$	21,023	$	—	$	—	$	17,286	$	17,286	$	—	$	—
Accrued expenses and other current liabilities:
Deferred non-employee director equity compensation plan liability ^(b)	$	226	$	226	$	—	$	—



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



Title of each class Common Stock ($0.01 par value)	Name of each exchange on which registered New York Stock Exchange


•	Style Circle Rewards^®can be redeemed online or in stores regardless of where they are earned.


	Fiscal Year						Fiscal Year
Department	2014		2013		2012
Women's ^(a)	38	%	38	%	39	%
Men's ^(b)	17		17		17
Merchandise Category							2016		2015		2014
Women’s							37	%	38	%	38	%
Men’s							17		17		17
Children's	11		11		12		12		11		11
Footwear	13		13		13		13		13		13
Accessories	8		8		8		7		7		8
Cosmetics/Fragrances	9		9		8		10		10		9
Home/Gifts/Other	4		4		3		4		4		4
	100	%	100	%	100	%	100	%	100	%	100	%



Location	Square Footage (in thousands)	Number of Stores Capable of Servicing
Jacksonville, Texas	437	600
South Hill, Virginia	162	240
Jeffersonville, Ohio	202	310
	801	1,150


	Fiscal Year Ended															Fiscal Year Ended
	January 31, 2015					February 1, 2014					Change					January 28, 2017					January 30, 2016				Change
	Amount			% to Sales ^(a)		Amount			% to Sales ^(a)		Amount			%		Amount			% to Sales ^(a)		Amount		% to Sales ^(a)		Amount			%
Net sales	$	1,638,569		100.0	%	$	1,609,481		100.0	%	$	29,088		1.8	%	$	1,442,718		100.0	%	$	1,604,433	100.0	%	$	(161,715	)	(10.1	)%
Cost of sales and related buying, occupancy and distribution expenses	1,188,763			72.5	%	1,172,995			72.9	%	15,768			1.3	%	1,144,666			79.3	%	1,208,002		75.3	%	(63,336		)	(5.2	)%
Gross profit	449,806			27.5	%	436,486			27.1	%	13,320			3.1	%	298,052			20.7	%	396,431		24.7	%	(98,379		)	(24.8	)%
Selling, general and administrative expenses	383,616			23.4	%	390,224			24.2	%	(6,608		)	(1.7	)%	356,064			24.7	%	387,859		24.2	%	(31,795		)	(8.2	)%
Store opening costs	2,488			0.2	%	2,902			0.2	%	(414		)	(14.3	)%
Interest expense	3,002			0.2	%	2,744			0.2	%	258			9.4	%	5,051			0.4	%	2,977		0.2	%	2,074
Income before income tax	60,700			3.7	%	40,616			2.5	%	20,084			49.4	%
Income tax expense	22,847			1.4	%	15,400			1.0	%	7,447			48.4	%
Income from continuing operations	37,853			2.3	%	25,216			1.6	%	12,637			50.1	%
Loss from discontinued operations, net of tax benefit of $4,228 and $5,237	(7,003		)	(0.4	)%	(8,574		)	(0.5	)%	1,571			(18.3	)%
Net income	$	30,850		1.9	%	$	16,642		1.0	%	$	14,208		85.4	%
Income (loss) before income tax																(63,063		)	(4.4	)%	5,595		0.3	%	(68,658		)
Income tax expense (benefit)																(25,166		)	(1.7	)%	1,815		0.1	%	(26,981		)
Net income (loss)																$	(37,897	)	(2.6	)%	$	3,780	0.2	%	$	(41,677	)

^(a) Percentages may not foot due to rounding.	^(a) Percentages may not foot due to rounding.															^(a) Percentages may not foot due to rounding.



	Fiscal Year 2014
	Q1			Q2			Q3			Q4
Net sales	$	372,040		$	377,446		$	364,197		$	524,886
Gross profit	77,941			112,340			88,166			171,359

Income (loss) from continuing operations	$	(12,046	)	$	11,192		$	(5,107	)	$	43,814
Loss from discontinued operations	(6,748		)	—			(161		)	(94		)
Net income (loss)	$	(18,794	)	$	11,192		$	(5,268	)	$	43,720

Basic earnings (loss) per share data:
Continuing operations	$	(0.38	)	$	0.35		$	(0.16	)	$	1.37
Discontinued operations	(0.22		)	—			(0.01		)	—
Basic earnings (loss) per common share	(0.60		)	0.35			(0.17		)	1.37

Diluted earnings (loss) per share data:
Continuing operations	$	(0.38	)	$	0.35		$	(0.16	)	$	1.36
Discontinued operations	(0.22		)	—			(0.01		)	—
Diluted earnings (loss) per common share	(0.60		)	0.35			(0.17		)	1.36

Basic weighted average shares	31,492			31,757			31,794			31,657
Diluted weighted average shares	31,492			31,825			31,794			31,740

	Fiscal Year 2013
	Q1			Q2			Q3			Q4
Net sales	$	372,103		$	389,991		$	354,850		$	492,537
Gross profit	89,629			115,575			83,290			147,992

Income (loss) from continuing operations	$	(6,188	)	$	10,832		$	(9,573	)	$	30,145
Loss from discontinued operations	(668		)	(1,225		)	(1,398		)	(5,283		)
Net income (loss)	$	(6,856	)	$	9,607		$	(10,971	)	$	24,862
Adjusted earnings (loss) (non-GAAP) ^(a)	$	(126	)	$	14,936		$	(7,021	)	$	32,197

Basic earnings (loss) per share data:
Continuing operations	$	(0.19	)	$	0.33		$	(0.30	)	$	0.95
Discontinued operations	(0.02		)	(0.04		)	(0.04		)	(0.17		)
Basic earnings (loss) per common share	(0.21		)	0.29			(0.34		)	0.79

Diluted earnings (loss) per share data:
Continuing operations	$	(0.19	)	$	0.32		$	(0.30	)	$	0.95
Discontinued operations	(0.02		)	(0.03		)	(0.04		)	(0.17		)
Diluted earnings (loss) per common share	(0.21		)	0.29			(0.34		)	0.78
Adjusted diluted earnings (loss) per common share ^(a)	—			0.45			(0.22		)	1.01

Basic weighted average shares	32,306			32,762			31,854			31,215
Diluted weighted average shares	32,306			33,073			31,854			31,438


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.


Fiscal Year	Minimum Lease Payments		Less: Interest		Principal Payments		Minimum Payments		Less: Interest		Principal Payments
2015	$	1,366	$	404	$	962
2016	1,366		311		1,055
2017	1,366		207		1,159		$	1,366	$	207	$	1,159
2018	1,096		101		995		1,096		101		995
2019	580		26		554		580		26		554
Total	$	5,774	$	1,049	$	4,725	$	3,042	$	334	$	2,708



Fiscal Year	Commitments		Sublease Income			Net Minimum Lease Commitments
2017	$	93,607	$	(1,365	)	$	92,242
2018	83,883		(1,447		)	82,436
2019	69,065		(1,447		)	67,618
2020	60,474		(1,492		)	58,982
2021	50,097		(1,582		)	48,515
Thereafter	136,632		(2,636		)	133,996
Total	$	493,758	$	(9,969	)	$	483,789



	Number of Outstanding Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at February 1, 2014	1,062,851		$	16.52
Exercised	(578,943	)	16.41
Forfeited	(65,383	)	17.68
Outstanding at January 31, 2015	418,525		$	16.49	2.2	$	1,468

Vested or expected to vest at January 31, 2015	404,572		$	16.41	2.2	$	1,452

Exercisable at January 31, 2015	348,762		$	16.02	2.0	$	1,387



Stock Options/ SARs	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested at February 1, 2014	292,075		$	7.97
Vested	(204,687	)	7.67
Forfeited	(17,625	)	8.60
Outstanding at January 31, 2015	69,763		8.69


Non-vested Stock	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at February 1, 2014	652,459		$	20.40
Outstanding at January 30, 2016					894,526		$	20.20
Granted	356,854		22.81		1,411,947		6.75
Vested	(254,220	)	19.89		(384,756	)	19.04
Forfeited	(76,489	)	21.24		(325,307	)	12.18
Outstanding at January 31, 2015	678,604		21.76
Outstanding at January 28, 2017					1,596,410		10.22



Period Granted	Target Shares Outstanding at Beginning of Year	Target Shares Granted	Target Shares Vested		Target Shares Forfeited		Target Shares Outstanding at End of Year	Weighted Average Grant Date Fair Value per Share
2012	198,200	—	(8,300	)	(20,800	)	169,100	$	18.04
2013	151,250	—	(9,941	)	(23,059	)	118,250	33.81
2014	—	168,445	—		(2,292	)	166,153	33.84
Total	349,450	168,445	(18,241	)	(46,151	)	453,503


		Fiscal Year			Fiscal Year
	2015 Target Allocation	2014	2013	2017 Target Allocation	2016	2015
Equity securities	50%	49%	56%	50%	51%	48%
Fixed income securities	50	50	42	50	48	51
Other - primarily cash	—	1	2	—	1	1
Total	100%	100%	100%	100%	100%	100%


Fiscal Year	Payments		Payments
2015	$	3,005
2016	3,529
2017	3,401		$	2,865
2018	3,133		2,642
2019	3,408		3,086
Fiscal years 2020 - 2024	15,641
2020			2,841
2021			2,998
Fiscal Years 2022 - 2026			13,902


	2014		2016
Balance, beginning of period	$	531	$	743
Additions based on tax positions related to 2014	79
Additions for tax positions for prior years	13
Release of FIN 48 reserve			(743		)
Balance, end of period	$	623	$	—



	February 1, 2014
Merchandise inventories, net	$	10,498
Property, equipment and leasehold improvements, net	732
Other assets	442
Liabilities	809