Stein Mart continues profit climb

JACKSONVILLE, FL — Fourth-quarter profits at off-price retailer Stein Mart Inc. jumped up by 15.4 percent, to $10.4 million from $9.0 million last year, even though sales were flat in the all-important Christmas quarter.

Sales at Stein Mart – in 2002 the nation's 34th largest retailer of home textiles products – were virtually unchanged, inching up just 0.3 percent, despite new store openings, to $408.4 million from $407.3 million the prior year. Same-store sales declined by 3.3 percent.

As of Feb. 1, Stein Mart changed to a 52-53 week fiscal year ending the Saturday closest to January 31. Previously, the fiscal year ended on the Saturday closest to Dec. 31. As a result of the shift in the fiscal year, information was unavailable to calculate operating profits, average gross margin or operating costs as a percentage of sales for the fourth quarter.

Launching an earnings recovery, for all of last year the off-pricer boosted profits by 34.8 percent, to $20.7 million from $15.4 million the prior year. Still, earnings remained well below the $39.4 million the company earned in 2000.

Sales last year improved by 6.7 percent as the firm opened new doors, to $1.4 billion from $1.3 billion the preceding year. Same-store sales slipped by 0.8 percent.

Providing a lift to the bottom line last year, Stein Mart widened margins and pared its interest expense. Average gross margin grew by 70 basis points, to 24.7 percent from 24.0 percent in 2001. Acting as a partial offset, costs climbed higher as well, rising by 30 basis points, to 23.2 percent of sales from 22.9 percent the previous year. Whittling down its debt load, the retailer pared its interest expense by more than a third last year, by 34.9 percent, to $2.6 million from $4.0 million, dropping about $1.4 million to the bottom line.