STEIN MART SAYS TREND SPOTTING IS CAUSE FOR 47% NET INCREASE
NEW YORK — Claiming to be capitalizing on having the right trends, Stein Mart Inc. reported earnings jumped 47.2 percent in the second quarter ended July 1 to $13.8 million, or 32 cents a share, from $9.4 million, or 21 cents, a year ago.
Sales for the off-pricer, which is based in Jacksonville, Fla., jumped 18.9 percent to $291.2 million from $244.9 million with a 12.8 percent hike in same-store sales.
Jay Stein, chairman and chief executive, said the results “reconfirm our fashion-forward approach to off-price retailing is successful when executed properly, and we are making significant progress toward regaining our historical operating margins.”
Operating margins improved to 7.9 percent from 6.4 percent a year ago.
“Our business gained sales momentum in the second quarter,” said Gwen K. Manto, executive vice president and chief merchandising officer, on a conference call. Manto said Stein Mart was helped by identifying key trends — such as microfiber pants in men’s, novelty sweaters and jackets in women’s, sterling jewelry and designer linens — early in the spring season and keeping them in stock.
Women’s apparel paced sales, she said. Boutique, focusing on designer and better, is the “number one trend” with “tremendous success” in casual and career-related separates and key item sweaters and pants. “Bright color, novelty treatments and stretch fabrications have been key,” Manto said. Women’s moderate apparel has been “running strong” in similar categories, as well as newer ones like animal prints and silk separates. For fall, Stein Mart will eliminate the less-productive junior concept and expand boutiques and special sizes. The introduction this month of a petite boutiques area is seeing “very positive” results.
In women’s accessories, a planned focus on bracelets, sterling jewelry and novelty handbags has paced gains. Intimate apparel has “also been very strong” with a “very successful” sleepwear program for Mother’s Day. Dress sales were up slightly with a “nice recovery in career and special sizes.”
Mens’ was ahead of plan and above the company trend, led by collections and key fashion items.
Children’s, which has been struggling, increased sales with the help of better assortments. Led by designer sheets and bedding, especially Ralph Lauren, the home area continued its strength.
Manto, formerly vice president and chief executive officer at Kids Foot Locker, a division of Venator Group, joined Stein Mart in February.
Stein Mart, which offers discounts of between 30 to 60 percent on current season merchandise, said it is able to gain lower prices up front from vendors because it doesn’t charge back for returns, markdowns or advertising allowances.
In the half, earnings climbed 53.8 percent to $14.8 million, or 34 cents, from $9.6 million, or 21 cents, from a year ago. Sales gained 17.4 percent to $536.6 million from $457 million, and gained 10.4 percent on a same-store basis.
Stein Mart added four stores in the quarter and now has 211. It plans 14 more in the second half.