Categories Consumer, Earnings

Stein Mart Q1 profit dips 46% on lower sales

Specialty off-price retailer Stein Mart Inc. (SMRT) reported a 46% dip in earnings for the first quarter of 2019 due to lower sales as well as the planned reduction from accelerated markdown cadence and the impact of the sales event shift.

Net income plunged 46% to $3.97 million and earnings dipped 50% to $0.08 per share. Adjusted earnings before interest, income taxes, depreciation and amortization for the first quarter dropped by 24.5% to $13.9 million.

Net sales declined 3.8% to $314.2 million. Net sales were impacted by comparable sales results and fewer stores operating during the quarter.

Stein Mart (SMRT) first quarter 2019 earnings snapshot
Image Courtesy: Stein Mart / Facebook post

Comparable sales decreased 1.7% during the first quarter due to lower store traffic and average unit retail, partially offset by higher units per transaction. Digital sales increased by 14% in the first quarter of 2019.

For the first quarter, gross margin fell to 27.8% from 29.4% a year ago, due to a planned rate decrease from a change in 2019 markdown cadence, the impact of the highly promotional event shift, and slightly higher markdowns to clear fall merchandise. Selling, general and administrative expenses decreased by $4.4 million year-over-year to $86.1 million, primarily from lower store related expenses including the impact of closed stores.

The company had 283 stores at the end of the first quarter of 2019 compared to 289 at the end of the first quarter of 2018. Stein Mart closed four stores during the first quarter, which completes its store plans for the year.

Also read: Target Q1 earnings report

Accounts payable was $20.9 million higher at the end of the first quarter compared to the prior year quarter, reflecting improved credit terms from its vendors and factors since the first quarter of 2018. Debt decreased $55.6 million to $153.8 million. Unused availability under credit facility increased $62 million to $102. Also, the company had $15.2 million available to borrow which would be collateralized by life insurance policies at the end of the quarter.

Looking forward, the company expects that its comp sales trends and results will improve in the second half, with its 2019 sales-driving initiatives rolling out this fall. The initiatives include launching two new product lines (kids and fine jewelry), buy online, pick up in store, and implementation of a marketing campaign management tool.

Shares of Stein Mart ended Tuesday’s regular session up 16.66% at $1.10 on the Nasdaq. Following the earnings release, the stock inched down over 7% in the pre-market session.

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

Most Popular

Key highlights from United Airlines Holdings (UAL) Q4 2020 earnings results

United Airlines Holdings, Inc. (NYSE: UAL) reported fourth quarter 2020 earnings results today. Total operating revenues declined 69% year-over-year to $3.4 billion. The company reported a net loss of $1.9

Infographic: Highlights of Kinder Morgan’s (KMI) Q4 2020 earnings report

Energy infrastructure firm Kinder Morgan, Inc. (NYSE: KMI) reported stronger-than-expected earnings for the fourth quarter of 2020, despite a decline in revenues. The company's stock was trading higher soon after

Netflix (NFLX) brushes past saturation concerns with strong subscriber growth across all markets

Shares of Netflix Inc. (NASDAQ: NFLX) soared 17% on Wednesday following an upbeat earnings report from the company a day ago. The stock has gained 81% over the past one


Add Comment
Viewing Highlight