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.”
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.