Stein Mart rebounds with profit in 2Q
July 30, 2001-- Home Textiles Today,
Staging a comeback from a first-quarter loss, Stein Mart Inc. recorded a second-quarter profit of $10.9 million, but earnings still declined by 21.4 percent from a year-ago profit of $13.8 million, the bottom line weighed down by thinning margins, higher costs and rising interest expense.
Lifted by nine new stores opened this year, sales advanced by 10.1 percent, to $320.7 million from $291.2 million last year. Same-store sales edged up by 1.5 percent, up against a year-ago gain of 12.8 percent.
Reflecting the hit-or-miss retail environment, same-store sales "went from mid-single-digit positive during April to negative during June," the company reported. And moving into the third quarter, same-store sales remain negative in July. This trend, if it persists, the company said, will put at risk its current assumption of low-single-digit same-store sales growth for the second half of the year, and its ability to hold earnings flat with year-ago levels.
Putting the bite on profits during the period, average gross margin eroded by 120 basis points, to 27.1 percent from 28.3 percent the prior year. But given a lift from the added sales, gross margin dollars still increased by 5.6 percent, to $86.9 million from $82.3 million. At the same time, costs climbed higher by 90 basis points, rising to 22.5 percent of sales from 21.6 percent a year ago.
Adding another modest level of pressure, interest costs, while still low, climbed higher by 15.2 percent, to $900,000 from $781,000.
"We believe the concern about the economic climate reduced traffic into our stores, despite our excellent spring merchandise selection," said chairman and ceo Jay Stein.
Stein Mart Inc.
|Qtr. 6/30 (x000)||2001||2000||% CHG|
|Oper. income (EBIT)||14,567||19,347||-24.7|
|Per share (diluted)||0.26||0.32||-18.8|
|Average gross margin||27.1%||28.3%||—|
|Oper. income (EBIT)||9,771||18,628||-47.5|
|Per share (diluted)||0.23||0.34||-32.4|
|Average gross margin||25.3%||26.0%||—|
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