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Stein Mart moving in the right direction

JACKSONVILLE , Fla. — Stein Mart was able to greatly narrow its loss this quarter as it closed 16 underperforming stores during 2003 and seven more in the first nine months of 2004, said executives during the company’s third quarter conference call today.

For the third quarter, the company reported a net loss of $2 million or 5 cents per diluted share, compared with a net loss of $10.4 million or 25 cents per share in the third quarter of 2003. Comparable stores sales increased 6.6 percent from the third quarter of 2003 and were up 9.6 percent from the fist nine months of 2003.

The company noted, however, that gross profit as a percentage of sales was hurt by increased markdowns instituted to reach desired levels of "inventory freshness."

"Although markdowns had to be increased post-hurricanes to achieve our stricter inventory targets for in-season merchandise, that effort resulted in much cleaner inventory levels for featuring new fall and holiday fashion going forward," said Michael Fisher, president and CEO.

The closed Stein Mart stores had operating losses of $1.3 million in the third quarter of 2004 and $10.2 million in the third quarter of 2003.

During the third quarter, the company opened new stores in Omaha , Neb. , Philadelphia , La Quinta, Calif. , and Jackson , Miss. ; closed one store in Sandy , Utah and relocated one store in Overland Park , Ky. One store in Stuart , Fla. , is being closed because of hurricane damage but is expected to re-open in the fourth quarter. At the end of the quarter, the company operated 259 locations compared with 264 at the same time last year.

For the fourth quarter, the company expects comparable store sales to increase 3 to 5 percent in each of the three months, expecting 40 to 43 cents per share versus 33 cents per share in the fourth quarter of 2003. Based on that, the company expects to earn 76 to 79 cents per diluted share for the year compared with 5 cents per share in 2003.

For 2005, Stein Mart plans to open approximately 15 new stores.

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