Stein Mart Q2 Profit Down 49% Despite Higher Sales

(RTTNews) - Apparel retailer Stein Mart, Inc. (SMRT) on Thursday reported a 49 percent decline in profit for the second quarter from last year as higher healthcare and pre-opening costs more than offset an increase in sales. However, revenue for the quarter missed analysts' expectations.

The Jacksonville, Florida-based company's net income for the second quarter was $1.74 million or $0.04 per share, down from $3.41 million or $0.08 per share in the year-ago period.

The latest quarter's results include $2.1 million higher healthcare costs and $0.6 million higher pre-opening costs compared to the year-ago quarter. These increases totaled $1.6 million after tax or $0.04 per share, and were due to unusually unfavorable claims experience this year compared to the prior-year period.

Adjusted net income for the quarter was $2.78 million or $0.06 per share, compared to $4.52 million or $0.10 per share in the year-ago period. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 2.5 percent to $298.16 million from $290.97 million in the year-ago period. Analysts had a consensus revenue estimate of $300.80 million for the quarter.

Comparable store sales for the quarter increased 1.3 percent.

Jay Stein, chief executive officer of Stein Mart said, "Despite a challenging first half of the year with weather impacting sales, we have a number of important initiatives in place. Key among these is our growth focus, as we open more new and relocated stores this fall and continue to build our ecommerce business."

At the end of the second quarter, Stein Mart operated 265 stores, up from 262 stores at the end of the year-ago period. The company expects to open six new stores, relocate four and close one during the second half of the year.

SMRT closed Wednesday's trading at $13.66. In Thursday's pre-market trades, the stock is down $0.12 or 0.88 percent to $13.54.