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JACKSONVILLE, Fla., May 20 /PRNewswire-FirstCall/ -- Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its first quarter ended May 1, 2004.
For the first quarter of 2004, the Company earned $11.5 million or $0.27 per share, as compared to net income of $1.5 million or $0.04 per share earned in the first quarter of 2003. Net sales for the first quarter were $363.6 million, a 10.8% increase over the $328.2 million in sales during the same period last year. Comparable store sales increased 11.8% from the first quarter of 2003 to the first quarter of 2004. Gross profit increased to $99.0 million, or 27.2% of net sales in the first quarter of 2004 compared to $83.2 million, or 25.4% of sales during the same period of 2003. Selling, general and administrative costs were $83.8 million or 23.1% of sales as compared to $83.7 million or 25.5% of sales during the prior year's first quarter.
"We were very pleased with the sales momentum which we sustained in the first quarter of 2004, and that our earnings reflect the productivity improvements put in place during the past several years," said Michael D. Fisher, president and chief executive officer of Stein Mart, Inc. "Our business was driven by both strong customer response to our full-priced spring fashion assortment as well as greater clearance efficiency as we took markdowns on seasonal merchandise."
The improvement in earnings was attributed to:
* An 11.8 percent increase in comparable store sales, and a leveraging of SG&A expenses as a result of the higher sales volume,
* An improvement in gross margin due to higher initial mark-up and better occupancy leverage, partially offset by an increase in markdowns, and
* The closure of 16 underperforming stores during 2003 and four stores in the first quarter of 2004. Those stores had operating losses of $1.1 million in the first quarter of 2004 and $4.1 million in the first quarter of 2003.
Inventory
At the end of the first quarter of 2004, average store inventories decreased 8.6 percent from last year's levels. Management believes these lowered levels are appropriate to maintain the freshness of fashion merchandise. The Company will continue its policy of taking markdowns earlier and more assertively to maintain inventory that is current and compelling.
Store Network
During the first quarter of 2004, Stein Mart opened one new store and closed four locations. One of those four locations (Green Bay, Wisconsin) as well as the two Albuquerque, New Mexico stores closed at the end of 2003 represent Stein Mart's exit from a market and are considered "discontinued operations" as required by SFAS 144. In the accompanying Statement of Operations for first quarter 2004, "discontinued operations" includes the Wisconsin store in 2004, and all three stores in the 2003 period.
At quarter-end, Stein Mart had 258 locations as compared to 270 at the same time last year. This morning, Stein Mart will open in Cherry Hill, New Jersey as an initial entry into the greater Philadelphia market. For the remainder of the year, Stein Mart expects to open 7-9 new stores, including two relocations. As previously announced, three more stores will close.
Promotional Strategy
The second quarter will be influenced by seasonal clearance activity, particularly in June and July. As it did following the Christmas selling season, the Company will begin in June to emphasize its "dot clearance" promotions within local newspapers, and scale back its branding campaign TV ads as well as its color newspaper inserts/mailers that were used heavily last year to deliver full-price coupons.
Second Quarter Earnings Guidance
Management now expects comparable store sales for the second quarter to increase 7-9 percent, which would produce earnings of approximately $0.06 to $0.09 per share.
Conference call
The Company will host a conference call with management to discuss these results at 10:30 a.m. Eastern Time today (May 20) and may be accessed by all interested parties at www.steinmart.com.
About Stein Mart
Stein Mart's 259 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 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
www.steinmart.com.
Stein Mart, Inc.
Balance Sheets
(In thousands)
May 1, January 31, May 3,
2004 2004 2003
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $43,904 $11,965 $17,052
Trade and other receivables 4,230 4,227 3,700
Inventories 288,176 283,379 329,838
Prepaid expenses and other current
assets 6,658 6,227 5,783
Total current assets 342,968 305,798 356,373
Property and equipment, net 76,242 76,934 86,133
Other assets 9,602 10,297 7,755
Total assets $428,812 $393,029 $450,261
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $97,402 $59,046 $96,802
Accrued liabilities 63,680 60,715 52,945
Income taxes payable 7,587 -- 907
Notes payable to banks -- -- 56,300
Total current liabilities 168,669 119,761 206,954
Notes payable to banks -- 24,962 --
Other liabilities 19,655 20,628 18,699
Total liabilities 188,324 165,351 225,653
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;
42,059,262; 41,993,529 and
41,568,678 shares issued and
outstanding, respectively 421 420 416
Paid-in capital 4,461 3,196 509
Unearned compensation (280) (309) --
Retained earnings 235,886 224,371 223,683
Total stockholders' equity 240,488 227,678 224,608
Total liabilities and
stockholders' equity $428,812 $393,029 $450,261
Stein Mart, Inc.
Statements of Operations
(Unaudited)
(In thousands except per share amounts)
For The 13 Weeks
Ended
May 1, May 3,
2004 2003
Net sales $363,608 $328,201
Cost of merchandise sold 264,563 244,981
Gross profit 99,045 83,220
Selling, general and administrative expenses 83,844 83,743
Other income, net 3,634 3,624
Income from operations 18,835 3,101
Interest expense 39 405
Income from continuing operations before income taxes 18,796 2,696
Provision for income taxes 7,142 1,025
Income from continuing operations 11,654 1,671
Loss from discontinued operations, net of tax benefit (139) (158)
Net income $11,515 $1,513
Basic income per share:
Continuing operations $0.27 $0.04
Discontinued operations -- --
Total $0.27 $0.04
Diluted income per share:
Continuing operations $0.27 $0.04
Discontinued operations -- --
Total $0.27 $0.04
Weighted-average shares outstanding - Basic 42,000 41,587
Weighted-average shares outstanding - Diluted 42,461 41,587SOURCE Stein Mart, Inc.
CONTACT: Susan Datz Edelman, Director, Stockholder Relations, Stein
Mart, +1-904-346-1506, or sedelman@steinmart.com
Web site: http://www.steinmart.com