Stein Mart: Home a "magnet" for new customers, increased sales in 3Q
HTT Staff -- Home Textiles Today, 11/18/2010 4:46:54 PM
Jacksonville, Fla. - Stein Mart Inc.'s re-launch of the home department is August proved a driver for the retailer in its third quarter, when the category performed "significantly better than the company trend."
"We're encouraged by this, and we're beginning to see new customers in the stores," said David Stovall Jr., president and ceo, during the company's earnings call this morning. "Some of the products have sold so well that we are challenged to restock the best sellers, and we're working to address that as quickly as possible."
Lamps and housewares were among the best performers, among several others, for the quarter.
"But some of the everyday [goods] didn't work," he added.
Also "challenged" were aspects of home décor, frames and tabletop.
But the 265-unit mid-tier off-price department store chain remains "positive about our home area going forward and we will continue to focus on it as a magnet for our customers," Stovall said.
Overall, Stein Mart managed to generate some solid results in the quarter, with a double-digit profit increase while sales declined less than 1%.
"In fact, this quarter was the first quarter of positive comp store sales since the fourth quarter of 2006," Stovall said.
Net income for the quarter, ended October 30, climbed 34.3% to $4.3 million, or 10 cents per share, compared to last year's $3.2 million, or 7 cents per share. The company noted that included in the results for both 2010 and 2009 were favorable income tax adjustments.
Comparable store sales increased 0.3%, and sales declined 0.9% to $267.9 million.
"Our results reflect the benefits of drawing more customers to our stores and continuing expense control," Stovall noted.
Because Stein Mart is looking to build its assortment for the holidays in several key areas, including home, inventories for the third quarter increased 10.76% to $281.0 million versus $253.7 million in 2009.
Home's holiday assortment is poised to be "much broader" this year, with expanded holiday décor goods that include linens.
Year-to-date net income jumped 44% to $29.9 million, or 67 cents per share, compared to $20.8 million, or 47 cents per share in 2009.
Sales dipped 3.7% to $844.8 million, and comparable store sales decreased 2.0%.
Stein Mart is "excited" about its readiness heading into holiday, but is planning "conservatively" around a still-cautious consumer, Stovall added.
"We head into the holiday season well positioned to attract more customers with distinctive merchandise at great prices, a targeted marketing plan and a terrific shopping experience," added Stovall. "Although the heavy promotional environment and a cautious shopper pose a challenge, we continue to be focused on gaining traction in sales growth."
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