Due to “actual and anticipated” accruals relating to a legal matter, Stein Mart Inc. said that it is revising its preliminary first-quarter results, which were released May 19.
The changes include an increase in selling, general and administrative expenses of $675,000; a decrease in net income of $419,000, or 1 cent a diluted share; and revised net income of $13.3 million, or 29 cents a share. Net income, as previously reported, was $13.7 million, or 30 cents.
“Subsequent to the previous release, but prior to the filing of our Form 10-Q for the first quarter ended April 30, 2016, new facts developed on these existing matters, which resulted in the adjustment,” the retailer said in a brief statement. “As a result of this revision, SG&A expenses for the first quarter of 2016 now include $1.4 million of expense for actual and anticipated legal settlements.”
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The retailer did not disclose the nature of the legal issue, but Stein Mart was sued last year on allegations of false advertising. Amid the legal issues, fourth-quarter bottom-line results were impacted by steep markdowns.
Meanwhile, first-quarter results were ahead of expectations, and the stock jumped more than 6 percent. The company’s newly minted chief executive officer, Dawn Robertson, told investors the company was launching a new initiative to bring in a younger, more modern customer.
“I firmly believe that this expansion of our customer base can have a significant impact on sales,” the ceo said, adding that initially about 20 percent of its stores would see a new merchandise rollout followed by a larger push later this year.
Jay Stein, chairman of the board, said first-quarter sales in “our existing stores were impacted by decreased traffic and a greater amount of fall clearance that hampered in-season selling.”
At the opening bell this morning, shares of Stein Mart fell 1.8 percent to $6.99. The stock’s 52-week high is $11.48 and the low is $5.61.