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Home heads Stein Mart's Q3

Jacksonville, Fla. - Stein Mart Inc. turned the corner in the third quarter, reporting a modest net income that marked a significant improvement over the company's year-ago net loss.

The 264-unit chain's net income came in at $28,000, or break-even per share, compared to a net loss of $1.7 million, or $0.04 loss per diluted share in last year's third quarter.

While all departments showed positive results, ceo Jay Stein noted that home is at the top.

"We continue to call out our home area as our very best performer, and it truly is," he said.

Total sales for the quarter increased 6.1% to $290.5 million, and comparable store sales increased 4.8%.

Year to date net income jumped 57.4% to $18.1 million, or 40 cents per share. Adjusted net income for the first nine months of 2012 was $10.2 million or $0.23 per diluted share.

Total sales increased 4.5% to $902.8 million, while comparable store sales increased 4.0%.

"We have been very focused on refining our brands, pricing and sales execution and the improvements are evident in our results," Stein said.

Stein Mart's recently launched e-commerce business has now been operational for less than three months, and the company noted that is "continually enhancing our site presentation and analyzing our results to drive online traffic."

Also noteworthy, Stein Mart said, is that the transition of its supply chain distribution centers from third-party to company-operated is nearly complete. The final distribution center in Ontario, Calif. (Los Angeles) will be fully operational in January.

Despite positive news in the third quarter, Stein Mart lowered its guidance for the fourth quarter, saying it expects the gross profit rate to be 100 basis points lower than last year's fourth quarter.
The company expects higher markdown levels compared to last year, when sales exceeded expectations; a higher balance of low-margin ecommerce sales in the mix; and a greater penetration of lower-margin home goods. Stein Mart also noted there were 53 weeks in the previous fiscal year, compared to 52 weeks in the current one.

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