Stein Mart profit soars
Gary Evans -- Furniture Today, May 21, 2009
Jacksonville, Fla. – Home continues to be the “most difficult area” in sales at Stein Mart, the company noted during its first-quarter earnings call last week.
The category could stand to lose inventory strength as the retailer works to reposition itself with new and existing customers, bending its focus to shoppers’ purchasing preferences.
“We’ve been selective in reducing the inventory by category,” explained David Stovall, president and ceo. “But we’re still chasing the top-growth areas with inventory plugging, but offsetting that with reductions in some of the businesses that have been slow.”
Such top-growth areas in merchandise lately include ladies dress assortments in Attitude and the chain’s modern fashion segments in women’s apparel.
“Both benefitted from our increased focus on these businesses,” Stovall said, adding that relaxed ladies sportswear – “which speaks to our core, traditional customer” – also did better than the company trend.
For the first quarter, profit at the 275-unit off-pricer skyrocketed 130% to $16.1 million, or 38 cents per diluted share, as compared to $7.0 million, or 17 cents per diluted share, during the same period last year.
Sales for the first quarter dropped 9.2% to $319.6 million, and comparable-store sales decreased 8.0%.
Gross profit decreased to $96.8 million from $97.7 million last year. As a percent of net sales, gross profit increased to 30.3% from 27.8% from 2008.
Stein Mart attributed gains in gross profit to increased markup and decreased markdowns, which were “slightly” offset by higher occupancy costs.
During the first quarter, Stovall said the company followed three primary business strategies:
* Keeping inventories “proportionate” and “realistic”;
* Reducing expenses to reflect revenue expectation;
* Staying focused on delivering to customers the message that “we offer a compelling value in this economic climate.”
In January, Stein Mart took heavy mark downs exiting the fourth quarter while it cut headcount and store hours to balance with lower sales volume.
“The effect of both these action is evident today,” he said.
Marketing enhancements, which kicked in during the spring with new TV advertisements, are also credited with aiding the first quarter.
“We’re definitely seeing improvement in both the response from our core customer, and most reaffirming [is that] the advertising seems to have increased ad awareness among a younger demographic,” said Glori Katz, svp, marketing and advertising.
Now Stein Mart is an active participant/member social media sites Facebook and Twitter.
In June, Stein Mart will debut its upgraded website, www.SteinMart.com.
“We are going to make it look fresher, more modern” Katz said. “It will lead her to the things she’s is coming to our website to learn about, [like] sign up for email [and] our preferred customer program, give her some of our trend information, and we’ll talk a little bit about our key merchandise that would be relevant.”
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