Home / Knowledge / News / News From the WEB / Stein Mart, Inc. Reports Fourth Quarter and Fiscal 2018 Results
Stein Mart, Inc. Reports Fourth Quarter and Fiscal 2018 Results
14
Mar '19

JACKSONVILLE, Fla., March 13, 2019 (GLOBE NEWSWIRE) Stein Mart, Inc. (NASDAQ: SMRT) today announced financial results for the fourth quarter and fiscal year ended February 2, 2019.

Operating income for the fourth quarter was $6.6 million in 2018 compared to $4.1 million in 2017. Adjusted operating income for the fourth quarter was $5.6 million in 2018 and $6.9 million in 2017 (see Note 1). Operating income for the year was $4.9 million in 2018 compared to an operating loss of $31.2 million in 2017. Adjusted operating income for the year was $6.3 million compared to an operating loss of $26.9 million in 2017 (see Note 1).

Net income for the fourth quarter of 2018 was $4.4 million or $0.09 per diluted share compared to a net loss of $0.4 million or $0.01 per diluted share in 2017. Adjusted net income for the fourth quarter was $3.4 million or $0.07 per diluted share compared to $3.5 million or $0.08 per diluted share in 2017 (see Note 1). For the year, net loss was $6.0 million or $0.13 per diluted share in 2018 compared to $24.3 million or $0.52 per diluted share in 2017. Adjusted net loss for the year was $4.5 million or $0.10 in 2018 and $19.9 million or $0.43 in 2017 (see Note 1). Net loss for 2017 includes an income tax benefit of $11.7 million compared to less than $0.1 million in 2018 (see Income Taxes below).

Adjusted earnings before interest, income taxes, depreciation and amortization (“EBITDA”) for the fourth quarter of 2018 was $13.6 million compared to $15.0 million for the fourth quarter of 2017. For the year, adjusted EBITDA increased $31.9 million to $39.5 million for 2018 from $7.6 million for 2017. (See Note 2.)

“Fourth quarter results reflect holiday sales that were below our expectations, with traffic impacted by changes we made to our holiday marketing strategy,” said Hunt Hawkins, Chief Executive Officer. “Despite our lower sales, operating results for fiscal 2018 were significantly better than last year due to our continued focus on inventory productivity, which drove our higher gross profit rate, and strong expense control.”

“As we begin 2019, we will continue to build upon the foundation we have laid. Although early first quarter sales have been slow to start, our new initiatives focused on sales growth give us the opportunity to improve annual results.”

Net Sales
Net sales for the 13-week fourth quarter ended February 2, 2019 were $340.8 million compared to $384.9 million for the 14-week fourth quarter ended February 3, 2018. Net sales for the 52-week fiscal year ended February 2, 2019 were $1.26 billion compared to $1.32 billion for 53-week fiscal year ended February 3, 2018. Net sales were impacted by comparable sales results, the closing of eight underperforming stores in fiscal 2018, as well as the benefit of a 53rd week in fiscal 2017.

Comparable sales for the 13-week period ended February 2, 2019 decreased 3.5 percent on a shifted basis, which compares to the same period ended February 3, 2018. Comparable sales for the 52-week period ended February 2, 2019 decreased 1.0 percent on a shifted basis. Comparable sales results for 2018 reflect lower store traffic partially offset by higher average unit retail and digital sales growth of 15 percent in the 13-week period and 62 percent in the 52-week period.

Gross Profit
Gross profit for the fourth quarter of 2018 was $92.5 million or 27.1 percent of sales compared to $102.4 million or 26.6 percent of sales in 2017. Gross profit for the year 2018 was $337.8 million or 26.9 percent of sales compared to $330.9 million or 25.1 percent of sales in 2017. The increase in the gross profit rate reflects higher gross margin from reduced markdowns and improved inventory productivity. For the fourth quarter, increases in the rate were offset by the deleverage of occupancy costs on lower sales.

Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses for the fourth quarter of 2018 were $89.5 million compared to $101.5 million in 2017. For the year, SG&A expenses were $348.1 million in 2018 and $376.1 million in 2017. The decrease in SG&A expenses was primarily from cost savings initiatives in the stores and corporate office, lower advertising expenses and the impact of closed stores. In addition, SG&A expenses in the 2018 fourth quarter and year benefitted from a $3.3 million decrease in accrued compensated absences as a result of a change in vacation policy.

Interest Expense, Net
Interest expense for the fourth quarter of 2018 was $2.5 million compared to $1.4 million in 2017. Interest expense for the year 2018 was $10.9 million compared to $4.8 million in 2017. The increase in interest expense is due to a higher blended interest rate, as well as overall higher rates.

Income Taxes
Income tax benefit was $0.3 million for fourth quarter of 2018 compared to income tax expense of $3.2 million for the fourth quarter of 2017. For the year, income tax benefit was less than $0.1 million in 2018 and $11.7 million 2017. The 2017 fourth quarter and year include additional expense related to the Tax Cuts and Jobs Act of 2017 (“Tax Act”) including a valuation allowance established against deferred tax assets (see Note 1). The small amount of income taxes in the 2018 fourth quarter and year reflects our net operating loss position along with the valuation allowance.

Cash Flows
Inventories were $255.9 million at the end of 2018 compared to $270.2 million last year. Average inventories per store were down 4.3 percent to last year.

Capital expenditures totaled $9.0 million in 2018 compared to $21.2 million in 2017. The decrease is due to fewer new stores and lower information system technology investments. For fiscal 2019, capital expenditures are planned flat to 2018 as we continue to focus on being efficient with our investments.

Credit terms from our vendors and factors, which were reduced earlier in the year, increased in the second half of the year. Accounts payable was $29.8 million lower at the end of 2018 compared to the end of 2017. Despite the trade credit tightening, debt decreased to $154.1 million at the end of 2018 compared to $156.1 million at the end of 2017. Unused availability under our credit facility was $58.2 million at the end of 2018. In addition, we had $14.5 million available to borrow which would be collateralized by life insurance policies at the end of the year.

Store Activity
We had 287 stores at the end of 2018 compared to 293 at the end of 2017. We opened two new stores and closed eight stores during 2018. For 2019, we are not planning to open any new stores and plan to close four stores during the first half; three of which were closed in February at natural lease expirations.

2019 Outlook
We expect the following factors to influence our business in 2019:

  • We anticipate flat to low single-digit increases in comparable sales
  • We expect to maintain our improved 2018 gross profit rate with leverage of occupancy costs, offset by higher Ecommerce fulfillment costs
  • SG&A expenses are expected to be about the same as in 2018
  • Interest expense is estimated to be approximately $1.5 million lower

Filing of Form 10-K
Reported results are preliminary and not final until the filing of our Form 10-K for the fiscal year ended February 2, 2019 with the Securities and Exchange Commission (“SEC”), and therefore remain subject to adjustment.

Conference Call
A conference call to discuss the Company’s fourth quarter and fiscal 2018 results will be held at 4:30 p.m. ET on March 13, 2019. The call may be heard on the Company’s investor relations website at http://ir.steinmart.com. A replay of the conference call will be available on the website through April 30, 2019.

Investor Presentation
Stein Mart’s fourth quarter and fiscal 2018 investor presentation has been posted to the investor relations portion of the Company’s website at http://ir.steinmart.com.

About Stein Mart
Stein Mart, Inc. is a national specialty off-price retailer offering designer and name-brand fashion apparel, home décor, accessories and shoes at everyday discount prices. Stein Mart provides real value that customers love every day both in stores and online. 

 
Stein Mart, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
           
    13 Weeks Ended 14 Weeks Ended 52 Weeks Ended 53 Weeks Ended
    February 2, 2019 February 3, 2018 February 2, 2019 February 3, 2018
           
Net sales   $ 340,847   $ 384,867   $ 1,257,598   $ 1,318,633  
Other revenue     3,609     3,208     15,134     13,936  
Total revenue     344,456     388,075     1,272,732     1,332,569  
Cost of merchandise sold     248,385     282,419     919,812     987,692  
Selling, general and administrative expenses     89,477     101,530     348,061     376,111  
Operating income (loss)     6,594     4,126     4,859     (31,234)  
Interest expense, net     2,476     1,351     10,882     4,788  
Income (loss) before income taxes     4,118     2,775     (6,023)     (36,022)  
Income tax (benefit) expense     (316)     3,190     (25)     (11,698)  
Net income (loss)   $ 4,434   $ (415)   $ (5,998)   $ (24,324)  
           
Net income (loss) per share:          
Basic   $ 0.09   $ (0.01)   $ (0.13)   $ (0.52)  
Diluted   $ 0.09   $ (0.01)   $ (0.13)   $ (0.52)  
           
Weighted-average shares outstanding:          
Basic     46,803     46,482     46,706     46,342  
Diluted     47,443     46,482     46,706     46,342  
           

 

 
Stein Mart, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except for share and per share data)
     
  February 2, 2019 February 3, 2018
ASSETS    
Current assets:    
Cash and cash equivalents $ 9,049   $ 10,400  
Inventories   255,884     270,237  
Prepaid expenses and other current assets   28,326     26,620  
Total current assets   293,259     307,257  
Property and equipment, net   123,838     151,128  
Other assets   24,108     24,973  
Total assets $ 441,205   $ 483,358  
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current liabilities:    
Accounts payable $ 89,646   $ 119,388  
Current portion of debt   -     13,738  
Accrued expenses and other current liabilities   77,650     78,453  
Total current liabilities   167,296     211,579  
Long-term debt   153,253     142,387  
Deferred rent   39,708     40,860  
Other liabilities   33,897     40,2

 

(This story has not been edited by Fibre2Fashion staff and is published from a syndicated feed.)


Must ReadView All

Possible changes to US-Korea FTA origin rules to be probed

Apparel/Garments | On 20th Mar 2019

Possible changes to US-Korea FTA origin rules to be probed

The US International Trade Commission is seeking inputs on a new...

Uzbekistan, UAE explore partnership in trade, investment

Textiles | On 20th Mar 2019

Uzbekistan, UAE explore partnership in trade, investment

Uzbekistan and the United Arab Emirates (UAE) have agreed to increase ...

Pic: Infor

Textiles | On 20th Mar 2019

ERP's future is network-centric, cloud-based: Infor

While traditional enterprise resource planning (ERP) was enterprise...

Interviews View All

Dharmendra Shah, Ozone PB Spintex Limited

Dharmendra Shah
Ozone PB Spintex Limited

‘We have made huge investments to ensure quality yarn production.’

Rashi Menda, Zapyle

Rashi Menda
Zapyle

Every fifth sale we make on Zapyle is a repeat purchase

Nitin Bhatia, Trend Arrest

Nitin Bhatia
Trend Arrest

Setting up a brand for online selling is easy, but running the brand is not

Vikas Banduke,

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Lucilla Booyzen,

Lucilla Booyzen

South African Fashion Week (SAFW) is a B2B marketing platform for fashion, ...

Hardik Sanghvi,

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Suresh Patel, Sidwin Fabric

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Matthew Kolmes, Supreme Corporation

Matthew Kolmes
Supreme Corporation

Supreme Corporation manufactures innovative specialty yarns and safety...

Mary-Cathryn Kolb, Brrr°

Mary-Cathryn Kolb
Brrr°

Atlanta-based private start-up Brrr° was founded in 2014 to develop...

Igor Chapurin, Chapurin

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Judy Frater, Somaiya Kala Vidya

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Silvia Venturini Fendi, Fendi s.r.l

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
March 2019

March 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search