Stein Mart sees comps improve slighting in 3Q, attracting younger shoppers

Jacksonville, Fla. – Even with comp improvements, Stein Mart’s overall business remained difficult in the third quarter, and the off-price mid-tier department store cited its home segment as an area still lagging in performance.

 “We have new leadership in the home store, and we think that that will help us as we go forward,” said David Stovall Jr., president and ceo. “There is still a lot of work to do there.”

For the third quarter, ended Oct. 31, the company's net earnings were $3.2 million, or 7 cents per share, compared to a net loss of $14.1 million, or 34 cents per share, in last year’s third quarter.

Sales decreased 9.6% to $270.2 million, and comps fell 6.2% from last year.

“While we made modest progress in comps in the third quarter, we still find sales conditions to be very challenging,” Stovall said. “The customer continues to need an additional incentive…to come into the store. While we are pleased with the level of freshness in our inventory, we do find that a lack of clearance merchandise in the third quarter over-challenged our sales efforts.”

Stein Mart, which operates 267 units nationwide, ended the quarter with average store inventories down more than 13% and clearance inventory down 34%.

Some good news came in customer traffic. “Transactions are up, and our data indicates that we’re attracting a new and younger customer with the marketing strategy,” noted Glori Kats, svp, marketing and advertising. “She seems to be reacting favorably to our relevant value message and our modern assortments.”

She added that Stein Mart has also is reactivating past customers, or “customers in our database who haven’t shopped us in more than a year. Our TV advertising has made up more top of mind with that customer again.”

Year-to-date results included net earnings of $20.8 million, or 47 cents per share as compared to a net loss of $15.1 million, or 37 cents per share for the same 2008 period. Sales dropped 8.9% to $877.3 million, and comps declined 6.3%.

Looking to the holiday season, Stovall said: “Our plan in this highly competitive retail environment is to maximize our opportunities for the holiday selling season and to end the season with clean inventory, and positioned for an optimal start to 2010."



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