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Stein Mart Plans 10 New Stores

Firm plans to enter Miami market with store in Aventura this spring.

Stein Mart Inc. this year has budgeted $12 million to open 10 stores in what chief executive officer Jay Stein called its “most aggressive store opening plan in more than 10 years.”

The Jacksonville, Fla.-based off-price department store, which ended fiscal 2013 with 264 units, plans to open three stores this spring, including former Loehmann’s locations in the Miami and Washington, D.C., markets, and seven in the fall.

“Having a store in the Miami area has been a dream of ours for years,” he said of the Aventura Mall location during a Thursday morning conference call to discuss fourth-quarter results.

Stein Mart closed two stores in February and plans to relocate six units during the course of the year. It’s raised its capital expenditures budget to $38 million with $13 million allocated for store remodels, $12 million for new and relocated stores and the remaining $13 million for upgrades of information systems, according to Gregory Kleffner, chief financial officer.

Details on the new stores came with word of fourth-quarter profits that fell 45.2 percent on a net basis while rising and landing above analysts’ consensus expectations on an adjusted basis. Net income for the 13 weeks ended Feb. 1 was $7.4 million, or 16 cents a diluted share, versus $13.5 million, or 30 cents, in the 14-week quarter of 2012. Excluding a series of charges, such as store impairment and a change in inventory accounting, adjusted EPS was 29 cents, 3 cents better than analysts’ consensus estimates and 1 cent above the adjusted EPS for the fourth quarter of 2012.

Net sales fell 2.1 percent, to $360.8 million from $368.6 million. Eliminating $15.8 million in sales from the 14th week of the prior-year period, comparable-store sales were up 3.1 percent and net sales rose 2.3 percent. Gross margin improved to 30.9 percent of sales from 28.8 percent in the 2012 period. Without the change in inventory accounting, gross margin was 28.1 percent of sales.

Stein said on the company call that sales trends had followed weather trends during the fourth quarter and had continued to do so in the first quarter of 2014.

“When it’s cold, our business is down significantly,” he said. “When it’s warm, our business is up significantly. Our first quarter will certainly be impacted by a slower start and will not be typical of what we expect for the full year.

“Overall, however, we remain very, very encouraged by what we’re seeing,” he concluded.

February comps were down 2.1 percent following a fiscal year in which they rose 3.7 percent, among the stronger performers by the small sample of stores that continue to report sales on a monthly basis.

Stein Mart expects gross margin for the new year to be “slightly” below the 29.1 percent of sales recorded in 2013.

For the full year, net income was up 2.1 percent to $25.6 million from $25 million while EPS was unchanged at 57 cents. Sales rose 2.5 percent to $1.26 billion from $1.23 billion.

Stein Mart, which aims to compete with the assortment and presentation of department and specialty stores while offering prices comparable with those of off-price chains, in 2012 derived 85 percent of its sales from apparel, accessories and footwear, with 45 percent of total revenues coming from women’s apparel.

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