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Stein Mart stumbles in third quarter

By Staff -- Home Textiles Today, 12/1/2003 12:00:00 AM

JACKSONVILLE, FLA. —

A whopping rise in expenses combined with declining sales to bring a poor third quarter to Stein Mart Inc.

The chain experienced huge increases in both its net loss and its operating loss during the quarter just ended as it struggled with the impact of store closings and the elimination of a coupon program.

Stein Mart's third-quarter net loss was $10.4 million, as compared with a 2002 third-quarter net loss of $3.8 million. The chain's operating loss was $19.6 million in the third quarter, compared with an $8.6 million operating loss the year before.

What hurt the chain's numbers in the third quarter was a staggering 480-basis point increase in its selling, general and administrative expenses as a percentage of sales, which finished the quarter at 29.5 percent. On a dollar basis, SG&A rose 13.2 percent, to $93.2 million.

Stein Mart closed eight stores in the third quarter as part of a program to eliminate 16 underperforming stores in 2003. The 3Q loss from operations from these stores was $9.7 million; $20.5 million for the year-to-date.

"Our third-quarter results were hurt by eliminating full-price coupons and closing eight stores," said Stein Mart's president and chief executive officer, Mike Fisher. "However, without the store-closing impact, we would have incurred a loss of 11 cents per share for the quarter and shown a slight operating profit year to date."

The chain's third-quarter sales were slightly more than $315.9 million, compared with $332.8 million in sales in last year's third quarter.

Stein Mart Inc.

Qtr. 11/1 (x000) 2003 2002 % chg
Sales $315,942 $332,847 -5.1
Operating income -19,636 -8,646 —
Net income -10,399 -3,843 —
Earnings per share -0.25 -0.09 —
Average gross margin 23.3% 22.1% —
SG&A percentage 29.5% 24.7% —
Nine months 2003 2002 % chg
Sales 950,047 1,000,253 -5.0
Operating income -27,508 8,390 —
Net income -11,659 10,300 —
Earnings per share -0.28 0.25 —
Average gross margin 24.0% 24.8% —
SG&A percentage 27.0% 24.0% —


Looking toward an easier '04

JACKSONVILLE, FL — The elimination of full-price coupons, a strategy Stein Mart started in July, will likely dampen results through the remainder of the year.

Stein Mart's comps suffered every month during the third quarter because of the coupon shift — and November and December will also be difficult, president and ceo Mike Fisher said during the company's quarterly conference call last week. However, once clearance sales begin in January, there will "be more parity in our marketing efforts."

Fourth quarter inventories are cleaner than last year and the chain has made "the proper investment in holiday product," he added.

"We feel our prospects for the coming year are much brighter, and if the economy gains additional traction, we will be able to take full advantage of a more favorable environment."

The six-market test of Stein Mart's "Once You Go You Get It" TV ad campaign, is producing above-chain comp results, he said.

Fisher also said that the new Raymond Waites collection has been "performing well," and the company is "encouraged by the early results."

In contrast, it will take another six to seven months to determine the "usability" of its 15,000-square-foot, small format store, Collections of Stein Mart. One of the three units is operating slightly below expectations; the other two are performing at expectations.

"We'll continue to use those as laboratories, and we have made adjustments to the marketing approach and also the layout of several of the stores," Fisher said.

A fourth location, in Amelia Island, FL, will open in early spring 2004.

Looking toward an easier '04

JACKSONVILLE, FL — The elimination of full-price coupons, a strategy Stein Mart started in July, will likely dampen results through the remainder of the year.

Stein Mart's comps suffered every month during the third quarter because of the coupon shift — and November and December will also be difficult, president and ceo Mike Fisher said during the company's quarterly conference call last week. However, once clearance sales begin in January, there will "be more parity in our marketing efforts."

Fourth quarter inventories are cleaner than last year and the chain has made "the proper investment in holiday product," he added.

"We feel our prospects for the coming year are much brighter, and if the economy gains additional traction, we will be able to take full advantage of a more favorable environment."

The six-market test of Stein Mart's "Once You Go You Get It" TV ad campaign, is producing above-chain comp results, he said.

Fisher also said that the new Raymond Waites collection has been "performing well," and the company is "encouraged by the early results."

In contrast, it will take another six to seven months to determine the "usability" of its 15,000-square-foot, small format store, Collections of Stein Mart. One of the three units is operating slightly below expectations; the other two are performing at expectations.

"We'll continue to use those as laboratories, and we have made adjustments to the marketing approach and also the layout of several of the stores," Fisher said.

A fourth location, in Amelia Island, FL, will open in early spring 2004.

Looking toward an easier '04

JACKSONVILLE, FL — The elimination of full-price coupons, a strategy Stein Mart started in July, will likely dampen results through the remainder of the year.

Stein Mart's comps suffered every month during the third quarter because of the coupon shift — and November and December will also be difficult, president and ceo Mike Fisher said during the company's quarterly conference call last week. However, once clearance sales begin in January, there will "be more parity in our marketing efforts."

Fourth quarter inventories are cleaner than last year and the chain has made "the proper investment in holiday product," he added.

"We feel our prospects for the coming year are much brighter, and if the economy gains additional traction, we will be able to take full advantage of a more favorable environment."

The six-market test of Stein Mart's "Once You Go You Get It" TV ad campaign, is producing above-chain comp results, he said.

Fisher also said that the new Raymond Waites collection has been "performing well," and the company is "encouraged by the early results."

In contrast, it will take another six to seven months to determine the "usability" of its 15,000-square-foot, small format store, Collections of Stein Mart. One of the three units is operating slightly below expectations; the other two are performing at expectations.

"We'll continue to use those as laboratories, and we have made adjustments to the marketing approach and also the layout of several of the stores," Fisher said.

A fourth location, in Amelia Island, FL, will open in early spring 2004.

Looking toward an easier '04

JACKSONVILLE, FL — The elimination of full-price coupons, a strategy Stein Mart started in July, will likely dampen results through the remainder of the year.

Stein Mart's comps suffered every month during the third quarter because of the coupon shift — and November and December will also be difficult, president and ceo Mike Fisher said during the company's quarterly conference call last week. However, once clearance sales begin in January, there will "be more parity in our marketing efforts."

Fourth quarter inventories are cleaner than last year and the chain has made "the proper investment in holiday product," he added.

"We feel our prospects for the coming year are much brighter, and if the economy gains additional traction, we will be able to take full advantage of a more favorable environment."

The six-market test of Stein Mart's "Once You Go You Get It" TV ad campaign, is producing above-chain comp results, he said.

Fisher also said that the new Raymond Waites collection has been "performing well," and the company is "encouraged by the early results."

In contrast, it will take another six to seven months to determine the "usability" of its 15,000-square-foot, small format store, Collections of Stein Mart. One of the three units is operating slightly below expectations; the other two are performing at expectations.

"We'll continue to use those as laboratories, and we have made adjustments to the marketing approach and also the layout of several of the stores," Fisher said.

A fourth location, in Amelia Island, FL, will open in early spring 2004.

Looking toward an easier '04

JACKSONVILLE, FL — The elimination of full-price coupons, a strategy Stein Mart started in July, will likely dampen results through the remainder of the year.

Stein Mart's comps suffered every month during the third quarter because of the coupon shift — and November and December will also be difficult, president and ceo Mike Fisher said during the company's quarterly conference call last week. However, once clearance sales begin in January, there will "be more parity in our marketing efforts."

Fourth quarter inventories are cleaner than last year and the chain has made "the proper investment in holiday product," he added.

"We feel our prospects for the coming year are much brighter, and if the economy gains additional traction, we will be able to take full advantage of a more favorable environment."

The six-market test of Stein Mart's "Once You Go You Get It" TV ad campaign, is producing above-chain comp results, he said.

Fisher also said that the new Raymond Waites collection has been "performing well," and the company is "encouraged by the early results."

In contrast, it will take another six to seven months to determine the "usability" of its 15,000-square-foot, small format store, Collections of Stein Mart. One of the three units is operating slightly below expectations; the other two are performing at expectations.

"We'll continue to use those as laboratories, and we have made adjustments to the marketing approach and also the layout of several of the stores," Fisher said.

A fourth location, in Amelia Island, FL, will open in early spring 2004.

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