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Stein Mart, Inc. (NASDAQ: SMRT) – Hot Stocks

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Stein Mart, Inc. (NASDAQ: SMRT) newly stated fiscal results for the 3rd-quarter finished November 2, 2k19.

Operating loss for the 3rd-quarter was $9.60M for 2k19 compared to an operating loss of $13.10M for 2k18. Net loss for the 3rd-quarter was $12.10M or $0.250 for each diluted share for 2k19 compared to net loss of $16.30M or $0.350 for each diluted share for 2k18.

“We saw a marked improvement in our sales trend in the 3rd-quarter. Comparable sales improved 250.0 basis points from the 1st-half of the year to essentially flat, driven by incremental sales from the launch of our Kids department and a double-digit incline in omni sales,” said Hunt Hawkins, Chief Executive Officer. “Our new fall initiatives are gaining traction and will continue to have a positive impact on our performance in the 4th-quarter.”

Net Sales
Net sales for the 3rd-quarter of 2k19 were $276.10M compared to $279.00M for the 3rd-quarter of 2k18. Net sales were impacted by fewer stores operating throughout the quarter. Comparable sales for the 3rd-quarter of 2k19 declined 0.10 percent (see Note 2). Omni sales, defined as all online sales regardless of fulfillment channel, inclined 18.00 percent over last year’s 3rd-quarter.

For the 1st-nine months of 2k19, net sales declined 3.70 percent to $882.70M while comparable sales declined 1.90 percent to previous year. Net sales were impacted by comparable sales results and fewer stores operating throughout the year. Omni sales inclined 13.00 percent over last year’s 1st-nine months.

Gross Profit
Gross profit for the 3rd-quarter of 2k19 was $69.40M or 25.10 percent of sales compared to $69.80M or 25.00 percent of sales in 2k18. For the 1st-nine months, gross profit was $231.50M or 26.20 percent of sales in 2k19 compared to $245.10M or 26.70 percent of sales in 2k18. The decline in the gross profit rate for the 1st-nine months of 2k19 primarily reflects higher markdowns as a percent of sales taken throughout the 1st-half of the year.

Selling, General and Administrative Costs
Selling, general and administrative (“SG&A”) costs for the 3rd-quarter were $83.30M in 2k19 compared to $86.60M in 2k18. SG&A costs for the 3rd-quarter of 2k19 include a $1.90M benefit from a Visa/MasterCard claim settlement. SG&A costs for the 3rd-quarter of 2k18 include $1.10M in advisory fees for the extension of our credit agreements and $0.70M in hurricane-related costs. (See Note 1.) Excluding these items from both durations, SG&A costs were $85.20M in 2k19 and $84.80M in 2k18.

For the 1st-nine months, SG&A costs were $247.90M in 2k19 and $258.10M in 2k18. Excluding the discrete items mentioned above from both durations, SG&A costs were $249.80M in 2k19 and $256.30M in 2k18. The decline in SG&A costs was primarily from lower store-related costs, including the impact of closed stores, partially offset by higher advertising costs for planned additional branded television.

Balance Sheet
Inventories were $307.10M at the end of the 3rd-quarter of 2k19 compared to $305.00M at the similar time last year. Inventories at the end of the 3rd-quarter of 2k19 included amounts to support our new Kids department. Excluding the impact of Kids, average inventories for each store were down slightly to last year.

Debt declined $20.60M to $171.00M at the end of the 3rd-quarter of 2k19 compared to $191.60M at the end of the 3rd-quarter of 2k18. Unused availability under our credit facility inclined $12.10M to $87.00M at the end of the 3rd-quarter of 2k19 compared to $74.90M at the end of the 3rd-quarter of 2k18. At the end of the 3rd-quarter of 2k19, we had an additional $12.60M available to borrow that would be collateralized by life insurance policies.

Store Activity
We had 283 stores at the end of the 3rd-quarter of 2k19 compared to 288 at the end of the 3rd-quarter of 2k18. We closed five stores throughout the 1st-nine months of 2k19, which completes our store plans for the year.

  • Comparable sales were essentially flat, improving 250.0 basis points from the 1st-half of the year
  • Net loss lowered 26.00 percent to $12.10M, or $0.250 for each share
  • Outstanding debt reduced $20.60M compared to end of 3rd-quarter of 2k18

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