Stein Mart, Inc. sinks on lackluster outlook for Q3
Shares of Stein Mart, Inc. (Nasdaq: SMRT) sunk today after the fashion merchandiser reported that it expects comparable store sales to decrease in its fiscal third quarter.
For the three months ending November 3, the company’s management expects comparable store sales to decline 2% to 4%, compared with the third quarter of 2006 in which comparable store sales increased 0.2%, based on current unfavorable selling trends.
According to company officials, despite a reduction of certain controllable expenses, there will be negative pressure put on its gross margins due to expected lowered sales.
Additionally, costs associated with new and recently opened stores that are not yet in the comparable store sales base could negatively impact the company’s bottom line.
Based on these variables, management said it expects to report a loss of $0.03 to $0.06 per share for the third quarter. Four analysts polled by Thomson Financial had anticipated earnings of $0.04 per share.
Stein Mart also reported results for its fiscal second quarter. For the three months ended August 4, the Jacksonville, Fla.-based company recorded net income of $2.2 million or $0.05 per diluted share, right in line with the consensus of five analysts polled by Thomson Financial. This compares with net income of $8.3 million, or $0.19 per diluted share, in the second quarter of 2006.
Net sales declined 1.7% to $330.7 million, compared with the sales of $336.3 million for the same period in 2006.
Comparable store sales decreased 1.2% from the second quarter last year.
Shares of Stein Mart slid $0.72, or 8%, to close at $8.28 Thursday.
