Stein Mart Cuts Back Soft Home
Cecile Corral -- Home Textiles Today, September 8, 2008
Home — mostly linens — was among the weakest categories for Stein Mart during its second quarter, giving the mid-tier off-price department store cause to narrow its inventories and in-store square footage at some of its stores going forward.
During its earnings call, evp and chief merchandising officer William Moll said Stein Mart has "reduced the overall home inventories, and the square footage devoted to home will be downsized in some stores …. We plan on reducing home in general."
Home is benefiting slightly from the 283-unit chain's overall effort to add more branded goods to its assortment. "Home is an area where we have been successful in securing more branded merchandise for our assortment," Moll added.
The second quarter proved to be yet another consecutive period of challenges and losses storewide. The net loss of $8.0 million or 19 cents per share marked a sharp decline from net income of $2.2 million or 5 cents per share for the same period last year.
Sales of $311.6 million were down 5.8% from last year, while comps dropped 9.7%.
"We are very disappointed with our second-quarter loss," said Linda McFarland Farthing, president and ceo. "Our lackluster same-store sales trend continued through second quarter. And in response to the highly promotional environment, we were forced to discount heavily in order to clear merchandise, so our top line suffered while our markdowns grew."
Some good news was that Stein Mart's inventory was down 12.8% on an average store basis. As a result, the retailer said its second-half assortments are "more current" than the prior year.
"Because of aggressive stance on markdowns, our assortment is far more current than it was at this time last year, giving us a much better platform for new fall merchandise," Farthing asserted. "Our planning for fall is necessarily prudent. But we have been spending a great deal of time and some very precious resources trying to impact what we can do to improve our performance."
On the topic of real estate, Stein Mart opened its last scheduled new store for the year in August. The plan now is to close nine to 10 stores by yearend.
Stein Mart, Inc.
|Qtr. 8/2 ($ millions)||2008||2007||% change|
|Oper. Income (EBIT)||(13.0)||3.7||—|
|Per share (diluted)||(0.19)||0.05||—|
|Average gross margin||23.8%||26.1%||—|
|Oper. Income (EBIT)||(0.9)||16.6||—|
|Per share (diluted)||(0.02)||0.24||—|
|Average gross margin||25.9%||27.0%||—|
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