Stein Mart reports profit despite lower sales: CEO credits clean inventory, expense control with earnings report
SMRT | Quote | Chart | News | PowerRating -- Despite a continued drop in sales, Stein Mart Inc. (NASDAQ: SMRT | Quote | Chart | News | PowerRating) on Thursday reported a profit for the third quarter ended Oct. 31.
The Jacksonville-based fashion retailer had net income of $3.2 million, or seven cents per diluted share, compared with a net loss of $14.1 million, or 34 cents a share, in the third quarter of 2008.
In a conference call with analysts and investors, CEO David Stovall said Stein Mart is profiting from strategies put in place late last year and early in 2009.
"Keeping our inventory clean and our expense structure tightly controlled are clearly working to improve the bottom line," he said.
But Stovall said the company's goal is to improve the top line -- that is, sales. Total sales in the quarter fell 9.6 percent to $270.2 million and comparable store sales fell by 6.2 percent.
"We still find sales conditions to be very challenging. The customer continues to need an additional incentive, usually a coupon, to come into the store. And while we are pleased with the level and freshness of our inventory, we do find that a lack of clearance merchandise in the third quarter further challenged our sales efforts," he said.
Florida has been one of the weaker sales markets for Stein Mart, which has 267 stores nationwide.
"The Florida business is inconsistent. We got some occasional glimmers, but it's not steadily better," Stovall said.
He said Stein Mart will be aggressively pursuing holiday business, with more advertising in the coming weeks.
"The big unknown is the consumer appetite -- just how much he intends to spend this year, on whom and for what. Because we're still not sure how to predict the behavior, we continue to be extremely conservative in projecting our results," he said.
The two analysts following Stein Mart had been forecasting a quarterly loss of six to seven cents. The unexpected profit helped Stein Mart's stock Thursday, as it rose $1.04 to close at $11.26.
To see more of The Florida Times-Union or to subscribe to the newspaper, go to
http://www.jacksonville.com. Copyright (c) 2009, The Florida Times-Union,
Jacksonville Distributed by McClatchy-Tribune Information Services. For
reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or
847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group
Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
For full details on Stein Mart Inc (SMRT) SMRT. Stein Mart Inc (SMRT) has Short Term PowerRatings at TradingMarkets. Details on Stein Mart Inc (SMRT) Short Term PowerRatings is available at This Link.
- Stein Mart, Inc. Reports Sales for January 2010, 4Q '09 and FY'09 - 02/04/10
- Stein Mart: The Trend Continues Lower (SMRT) - 02/04/10
- Stein Mart names new executive vice president and chief merchandising officer - 02/01/10
- Morrow Named Merchandising Chief At Stein Mart - 02/01/10
- Stein Mart, Inc. Appoints Brian R. Morrow as Chief Merchant - 01/29/10
- More News >>
