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JACKSONVILLE, Fla., Nov. 18 /PRNewswire-FirstCall/ -- Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its third quarter and nine months ended October 30, 2004.
For the third quarter of 2004, the Company reported a net loss of $(2.0) million or $(0.05) per diluted share, as compared to a net loss of $(10.4) million or $(0.25) per diluted share in the third quarter of 2003. Net sales for the third quarter were $330.4 million, a 5.4% increase over the $313.6 million in sales during the same period last year. Comparable store sales increased 6.6% from the third quarter of 2003 to the third quarter of 2004. Gross profit increased to $76.5 million, or 23.2% of net sales in the third quarter of 2004, compared to $73.4 million, or 23.4% of sales during the same period of 2003. Selling, general and administrative (SG&A) costs were $83.2 million, or 25.2% of sales, as compared to $92.4 million, or 29.5% of sales during the prior year's third quarter. Included in SG&A is $1.1 million for store closing and asset impairment charges in the third quarter of 2004 as compared to $7.7 million in the third quarter of 2003.
The improvement in year-over-year performance was attributed to:
* A 6.6 percent increase in comparable store sales, leveraging of SG&A and occupancy expenses as a result of the higher sales volume, and reduced store closing and impairment charges
* An increase in gross profit dollars; however, gross profit as a percent of sales was negatively affected by increased markdowns necessary to reach targeted levels of inventory freshness
* The closure of 16 stores during 2003 and seven stores in the first nine months of 2004. Those stores had operating losses of $(1.3) million or $(0.02) per share in the third quarter of 2004 and $(10.2) million or $(0.15) per share in the third quarter of 2003. For the first nine months, those stores had operating losses of $(3.5) million or $(0.05) per share this year compared to $(21.6) million or $(0.32) per share last year.
For the first nine months of 2004, the Company earned $15.1 million or $0.36 per diluted share, as compared to a net loss of $(11.7) million or $(0.28) per diluted share in the first nine months of 2003. Net sales for the first nine months were $1,014.7 million, a 7.6% increase over the $942.7 million in sales during the same period last year. Comparable store sales increased 9.6% from the first nine months of 2003 to the first nine months of 2004. Gross profit increased to $259.8 million, or 25.6% of net sales in the first nine months of 2004, compared to $227.4 million, or 24.1% of sales, during the same period of 2003. Selling, general and administrative costs were $245.7 million or 24.2% of sales as compared to $253.8 million or 26.9% of sales during the prior year's first nine months. Included in SG&A is $1.5 million for store closing and asset impairment charges in the first nine months of 2004 as compared to $10.4 million in the same period last year.
"Our sales were driven by an enthusiastic response to new fall merchandise and to the colorful assortments which have resonated with customers all year," said Michael D. Fisher, president and chief executive officer of Stein Mart, Inc. "Although markdowns had to be increased post-hurricanes to achieve our stricter inventory targets for in-season merchandise, that effort resulted in much cleaner inventory levels for featuring new fall and holiday fashion going forward."
Store Network
During the third quarter of 2004, Stein Mart opened four new stores (Omaha, NE; Philadelphia, PA; La Quinta, CA; and Jackson, MS), closed one store (Sandy, UT) and relocated one store (Overland Park, KS). One store in Stuart, FL is currently closed because of hurricane damage but is expected to re-open in the fourth quarter. At the end of the third quarter, the Company operated 259 locations as compared to 264 at the same time last year. Currently, 242 stores that account for approximately 95% of sales are considered "comparable," i.e. open for at least the entire prior fiscal year.
Since the end of the third quarter, Stein Mart has completed its store opening activity for 2004. A third location in Philadelphia opened and a store in Indianapolis, IN was relocated. For the full year, Stein Mart opened seven new stores, relocated two others into more advantageous properties within their markets, and closed seven locations. At year-end, the Company expects to have 261 stores in operation, including the aforementioned Stuart, FL store.
For 2005, the Company plans to open approximately 15 new stores.
Promotional Strategy
During the fourth quarter, management will continue to focus advertising dollars on television and color fashion inserts. Because there is significantly less clearance merchandise in the stores, the level of shopping pass activity (percent discounts given on sale and clearance goods) is expected to be substantially less than it was in the pre-holiday months last year.
Fourth Quarter Earnings Guidance
For the fourth quarter, management expects comparable store sales to increase 3-5 percent in each of the three months, with more opportunity in November and December than January. If those sales assumptions are realized, the Company would expect to earn $0.40 to $0.43 in the fourth quarter of 2004 as compared to $0.33 per share in the fourth quarter of 2003. Based on those expectations, the Company would expect to earn $0.76 to $0.79 per diluted share for the year, as compared to earnings of $0.05 in 2003.
Conference call
The Company will host a conference call with management to discuss these results at 10:30 a.m. Eastern Time today (November 18) and may be accessed by all interested parties at http://www.steinmart.com .
About Stein Mart
Stein Mart's 260 stores offer the fashion merchandise, service and presentation of a better department or specialty store, at prices competitive with off-price retail chains. Currently with locations from California to New York, Stein Mart's focused assortment of merchandise features moderate to designer brand-name apparel for women, men and young children, as well as accessories, gifts, linens and shoes.
SAFE HARBOR STATEMENT>>>>>>>Except for historical information contained herein, the statements in this release may be forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company does not assume any obligation to update or revise any forward-looking statements even if experience or future changes make it clear that projected results expressed or implied will not be realized. Forward-looking statements involve known and unknown risks and uncertainties that may cause Stein Mart's actual results in future periods to differ materially from forecasted or expected results. Those risks include, but are not limited to, on-going competition from other retailers, availability of new store sites at acceptable lease terms, ability to successfully implement strategies to exit or improve under-performing stores, changing preferences in apparel, changes in consumer spending due to current events and/or general economic conditions, the effectiveness of new advertising, marketing and promotional strategies, adequate sources of merchandise at acceptable prices and the other risks and uncertainties described in the Company's filings with the Securities and Exchange Commission.
Additional information about Stein Mart, Inc. can be found at http://www.steinmart.com .
Stein Mart, Inc.
Balance Sheets
(In thousands)
October 30, January 31, November 1,
2004 2004 2003
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 35,146 $ 11,965 $ 13,555
Trade and other receivables 3,934 4,227 9,359
Inventories 322,664 283,379 365,494
Prepaid expenses and other current
assets 14,962 6,227 10,115
Total current assets 376,706 305,798 398,523
Property and equipment, net 79,655 76,934 81,541
Other assets 10,724 10,297 10,091
Total assets $467,085 $393,029 $490,155
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $129,191 $59,046 $123,206
Accrued liabilities 69,437 60,715 58,898
Total current liabilities 198,628 119,761 182,104
Notes payable to banks -- 24,962 74,968
Other liabilities 20,114 20,628 21,151
Total liabilities 218,742 165,351 278,223
COMMITMENTS AND CONTINGENCIES
Stockholders' equity:
Preferred stock - $.01 par value;
1,000,000 shares authorized;
no shares outstanding
Common stock - $.01 par value;
100,000,000 shares authorized;
42,494,654, 41,993,529 and
41,729,713 shares issued and
outstanding, respectively 425 420 417
Paid-in capital 8,865 3,196 1,374
Unearned compensation (454) (309) (370)
Retained earnings 239,507 224,371 210,511
Total stockholders' equity 248,343 227,678 211,932
Total liabilities and
stockholders' equity $467,085 $393,029 $490,155
Stein Mart, Inc.
Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
13 Weeks Ended 39 Weeks Ended
October 30, November 1, October 30, November 1,
2004 2003 2004 2003
Net sales $330,432 $313,559 $1,014,664 $942,713
Cost of merchandise sold 253,920 240,139 754,880 715,327
Gross Profit 76,512 73,420 259,784 227,386
Selling, general and
administrative expenses 83,192 92,385 245,740 253,800
Other income, net 3,293 3,275 10,460 9,959
Income (loss) from operations (3,387) (15,690) 24,504 (16,455)
Interest income 108 -- 181 --
Interest expense -- (421) (39) (1,313)
Income (loss) from continuing
operations before income
taxes (3,279) (16,111) 24,646 (17,768)
Income tax benefit (provision) 1,246 6,122 (9,365) 6,752
Income (loss) from continuing
operations (2,033) (9,989) 15,281 (11,016)
Loss from discontinued
operations, net of tax benefit -- (410) (145) (643)
Net income (loss) $(2,033) $(10,399) $15,136 (11,659)
Basic income (loss) per share:
Continuing operations $ (0.05) $ (0.24) $ 0.36 $ (0.26)
Discontinued operations -- (0.01) -- (0.02)
Total $ (0.05) $ (0.25) $ 0.36 $ (0.28)
Diluted income (loss) per
share:
Continuing operations $ (0.05) $ (0.24) $ 0.36 $ (0.26)
Discontinued operations -- (0.01) -- (0.02)
Total $ (0.05) $ (0.25) $ 0.36 $ (0.28)
Weighted-average shares
outstanding - Basic 42,394 41,658 42,181 41,615
Weighted-average shares
outstanding -Diluted 42,394 41,658 42,578 41,615SOURCE: Stein Mart, Inc.
CONTACT: Susan Datz Edelman, Director, Stockholder Relations, Stein Mart, Inc., +1-904-346-1506, or sedelman@steinmart.com
Web site: http://www.steinmart.com
Audio: http://www.steinmart.com