Stein Mart, Inc. Reports First Quarter Fiscal 2018 Results

Stein Mart, Inc. (NASDAQ:SMRT) today announced financial results for the first quarter ended May 5, 2018 and raised its first half 2018 outlook.

Net income for the first quarter was $7.3 million or $0.16 per diluted share compared to a net income of $3.7 million or $0.08 per diluted share in 2017. Operating income for the first quarter was $9.9 million compared to $10.1 million in 2017. First quarter 2018 results include less than $0.1 million in income tax expense (see Income Taxes below).

Adjusted earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the first quarter was $18.4 million compared to $19.3 million in 2017 (see Note 1).

“Comparative sales trends showed considerable improvement for the quarter and operating income exceeded our expectations. Continuing strong inventory productivity drove a significantly higher gross profit rate. The higher gross profit and our below-plan expenses more than offset the impact of somewhat lower sales,” said Hunt Hawkins, Chief Executive Officer. “With better first quarter results, we now expect first-half operating income to be in excess of $10 million instead of the $8 million we previously discussed. Also, while it is early in the second quarter, we are pleased with May’s positive comparable sales trend which reflects the return of seasonal temperatures.”

Net Sales
Total sales for the first quarter of 2018 were $326.7 million, a decrease of 3.2 percent compared with $337.3 million for the first quarter of 2017. The decrease in total sales includes the impact of six stores closed in 2017 and four stores closed during the first quarter of 2018. Comparable store sales for the first quarter of 2018 decreased 0.7 percent including sales from leased departments (see Note 2). Ecommerce sales were up 85 percent over last year’s first quarter.

Other Revenue
During the first quarter of 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). As a result of the new accounting standard, income relating to our credit card program and gift card breakage that previously offset selling, general and administrative (“SG&A”) expenses has been recorded in other revenue in the Condensed Consolidated Statements of Income for all periods presented. The increase in other revenue for the first quarter of 2018 is the result of higher penetration from our growing credit card program.

Gross Profit
Gross profit for the first quarter of 2018 was $96.1 million or 29.4 percent of sales compared to $95.6 million or 28.3 percent of sales in 2017. The 110 basis points expansion in the gross profit rate was driven primarily by higher gross margin from reduced markdowns and better inventory productivity. Occupancy costs were flat for the quarter, but higher as a percentage of sales.
more detail at: http://ir.steinmart.com/news-releases/news-release-details/stein-mart-inc-reports-first-quarter-fiscal-2018-results

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