Stein Mart, Inc. Reports First Quarter Fiscal 2016 Results
May 19 2016 - 7:30AM
Stein Mart, Inc. (NASDAQ:SMRT) today announced financial results
for the first quarter ended April 30, 2016.
First Quarter Highlights
- Diluted earnings per share of $0.30 compared to $0.29 in
2015
- Total sales increased 0.6 percent and comparable store sales
decreased 3.4 percent
- 2016 store opening plan increased to 13 new stores
“We were able to deliver higher first quarter
earnings by maintaining our gross profit rate and controlling
expenses on slightly higher total sales driven by our new stores,”
said Jay Stein, Chairman of the Board. “Sales in our existing
stores were impacted by decreased traffic and a greater amount of
fall clearance that hampered in-season selling. We cleared excess
fall seasonal merchandise as planned and are pleased with the
levels and freshness of our Spring inventories going into the
second quarter.”
Net income for the first quarter was $13.7 million
or $0.30 per diluted share compared to net income of $13.6 million
or $0.29 per diluted share in 2015. Adjusted earnings before
interest, income taxes, depreciation and amortization (EBITDA) for
the quarter was $32.9 million compared to $30.9 million in 2015
(see Note 1).
SalesTotal sales for the first quarter of 2016
were $355.7 million compared to $353.5 million in 2015. Comparable
store sales decreased 3.4 percent due to lower traffic and lower
average unit retail (AUR). AUR was lower due to a higher amount of
fall clearance selling this quarter compared to the first quarter
of 2015.
Gross ProfitGross profit for the first quarter
of 2016 was $108.9 million or 30.6 percent of sales compared to
$108.4 million or 30.7 percent of sales in 2015.
Selling, General and Administrative
ExpensesSelling, general and administrative (SG&A)
expenses for the first quarter of 2016 were $85.8 million or 24.1
percent of sales compared to $85.6 million or 24.2 percent of sales
in 2015.
InventoriesInventories were $317
million at the end of the first quarter of 2016 compared to $303
million at the same time last year. Average inventories per store
were flat to last year.
Interest Expense and DebtInterest expense for
the first quarter of 2016 was $1.0 million compared to $0.7 million
in 2015. Borrowings under our credit facilities were $149 million
at the end of the first quarter. Unused availability was $113
million at the end of the quarter.
Store ActivityWe had 283 stores at the end of
the first quarter compared to 270 last year. We opened five new
stores during the quarter. Pre-opening costs related to new and
relocated stores were $1.1 million for the first quarter of 2016
compared to $344 thousand in last year’s first quarter.
We are now expecting to open a total of 13 new stores, close two
stores (August 2016 and January 2017) and relocate two stores in
2016. We continue to expect that new stores will increase sales an
estimated 4 percent above our comparable store sales results for
the year.
Filing of Form 10-QReported results are
preliminary and not final until the filing of our Form 10-Q for the
fiscal quarter ended April 30, 2016 with the Securities and
Exchange Commission (SEC), and therefore remain subject to
adjustment.
Conference CallA conference call for investment
analysts to discuss the Company’s first quarter 2016 results will
be held at 10 a.m. ET on May 19, 2016. The call may be heard on the
investor relations portion of the Company’s website at
http://ir.steinmart.com or
http://edge.media-server.com/m/p/gbtfhwoy. A replay of the
conference call will be available on the website through May 31,
2016.
Investor PresentationStein Mart’s first quarter
2016 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 stores offer the
fashion merchandise, service and presentation of a better
department or specialty store, at prices competitive with off-price
retail chains. With 283 locations from California to Massachusetts,
as well as steinmart.com, Stein Mart’s focused assortment of
merchandise features current season, moderate to better fashion
apparel for women and men, as well as accessories, shoes and home
fashions. For more information, please visit
www.steinmart.com.
Cautionary Statement Regarding Forward-Looking
Statements
Except for historical information contained herein, the statements
in this release may be forward-looking, and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The Company does not assume any obligation to
update or revise any forward-looking statements even if experience
or future changes make it clear that projected results expressed or
implied will not be realized. Forward-looking statements involve
known and unknown risks and uncertainties that may cause Stein
Mart’s actual results in future periods to differ materially from
forecasted or expected results. Those risks include, without
limitation: consumer sensitivity to economic conditions,
competition in the retail industry, changes in consumer preferences
and fashion trends, ability to implement our strategic plans to
sustain profitable growth, effectiveness of advertising and
marketing, capital availability and debt levels, ability to
negotiate acceptable lease terms with current and potential
landlords, ability to successfully implement strategies to exit
under-performing stores, extreme and/or unseasonable weather
conditions, adequate sources of merchandise at acceptable prices,
dependence on certain key personnel and ability to attract and
retain qualified employees, impacts of seasonality, increases in
the cost of compensation and employee benefits, disruption of the
Company’s distribution process, dependence on imported merchandise,
information technology failures, data security breaches, single
supplier for shoe department, single provider for ecommerce
website, acts of terrorism, ability to adapt to new regulatory
compliance and disclosure obligations, material weaknesses in
internal control over financial reporting and other risks and
uncertainties described in the Company’s filings with the SEC.
SMRT-F
###
Additional information about Stein Mart, Inc. can
be found at www.steinmart.com
|
Stein Mart, Inc. |
Condensed Consolidated Statements of
Income |
(Unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
|
|
13 Weeks Ended |
13 Weeks Ended |
|
|
April 30, 2016 |
May 2, 2015 |
|
|
|
|
Net sales |
|
$ |
355,712 |
|
$ |
353,521 |
|
Cost of merchandise
sold |
|
|
246,820 |
|
|
245,141 |
|
Gross profit |
|
|
108,892 |
|
|
108,380 |
|
Selling, general and
administrative expenses |
|
|
85,799 |
|
|
85,622 |
|
Operating income |
|
|
23,093 |
|
|
22,758 |
|
Interest expense,
net |
|
|
966 |
|
|
686 |
|
Income before income taxes |
|
|
22,127 |
|
|
22,072 |
|
Income tax expense |
|
|
8,397 |
|
|
8,508 |
|
Net income |
|
$ |
13,730 |
|
$ |
13,564 |
|
|
|
|
|
Net income per
share: |
|
|
|
Basic |
|
$ |
0.30 |
|
$ |
0.30 |
|
Diluted |
|
$ |
0.30 |
|
$ |
0.29 |
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
Basic |
|
|
45,595 |
|
|
44,612 |
|
Diluted |
|
|
46,275 |
|
|
45,766 |
|
|
|
|
|
Stein Mart, Inc. |
Condensed Consolidated Balance
Sheets |
(Unaudited) |
(In thousands, except for share and per share
data) |
|
|
|
|
|
April 30, 2016 |
January 30, 2016 |
May 2, 2015 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
16,317 |
|
$ |
11,830 |
|
$ |
17,190 |
|
Inventories |
|
316,897 |
|
|
293,608 |
|
|
302,781 |
|
Prepaid
expenses and other current assets |
|
22,676 |
|
|
18,586 |
|
|
24,586 |
|
Total current assets |
|
355,890 |
|
|
324,024 |
|
|
344,557 |
|
Property
and equipment, net |
|
166,261 |
|
|
162,954 |
|
|
149,254 |
|
Other
assets |
|
30,141 |
|
|
29,247 |
|
|
31,026 |
|
Total assets |
$ |
552,292 |
|
$ |
516,225 |
|
$ |
524,837 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
152,807 |
|
$ |
105,569 |
|
$ |
164,092 |
|
Current
portion of debt |
|
10,000 |
|
|
10,000 |
|
|
6,667 |
|
Accrued
expenses and other current liabilities |
|
74,960 |
|
|
71,571 |
|
|
67,219 |
|
Total current liabilities |
|
237,767 |
|
|
187,140 |
|
|
237,978 |
|
Long-term debt |
|
138,960 |
|
|
180,150 |
|
|
145,777 |
|
Deferred
rent |
|
41,667 |
|
|
41,146 |
|
|
33,654 |
|
Other
liabilities |
|
45,744 |
|
|
31,472 |
|
|
36,677 |
|
Total liabilities |
|
464,138 |
|
|
439,908 |
|
|
454,086 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
Shareholders’ equity: |
|
|
|
Preferred stock - $.01 par value; 1,000,000 shares |
|
|
|
authorized; no shares issued or
outstanding |
|
|
|
Common
stock - $.01 par value; 100,000,000 shares |
|
|
|
authorized; 46,372,908, 45,814,583
and 45,395,851 |
|
|
|
shares issued and outstanding,
respectively |
|
464 |
|
|
458 |
|
|
454 |
|
Additional paid-in capital |
|
44,370 |
|
|
42,801 |
|
|
37,476 |
|
Retained
earnings |
|
43,594 |
|
|
33,337 |
|
|
33,249 |
|
Accumulated other comprehensive loss |
|
(274 |
) |
|
(279 |
) |
|
(428 |
) |
Total shareholders’ equity |
|
88,154 |
|
|
76,317 |
|
|
70,751 |
|
Total liabilities and shareholders’
equity |
$ |
552,292 |
|
$ |
516,225 |
|
$ |
524,837 |
|
|
|
|
|
NOTE TO PRESS RELEASE
Note 1 – EBITDA:As used in this
release, EBITDA is defined as earnings before interest, income
taxes, depreciation and amortization. EBITDA is not a measure
of financial performance under generally accepted accounting
principles (GAAP). However, we present EBITDA in this release
because we consider it to be an important supplemental measure of
our performance and because it is frequently used by analysts,
investors and others to evaluate the performance of
companies. EBITDA is not calculated in the same manner by all
companies. EBITDA should be used as a supplement to results of
operations and cash flows as reported under GAAP and should not be
considered to be a more meaningful measure than, or an alternative
to, measures of operating performance as determined in accordance
with GAAP.
|
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA |
|
Unaudited (in thousands) |
|
|
|
|
13 Weeks |
13 Weeks |
|
|
|
|
Ended |
Ended |
|
|
|
|
April 30, 2016 |
May 2, 2015 |
|
|
Net
income |
$ |
13,730 |
|
$ |
13,564 |
|
|
|
Add back
amounts for computation of EBITDA: |
|
|
|
|
Interest expense,
net |
|
966 |
|
|
686 |
|
|
|
Income tax expense |
|
8,397 |
|
|
8,508 |
|
|
|
Depreciation and
amortization |
|
7,660 |
|
|
7,223 |
|
|
|
EBITDA |
|
30,753 |
|
|
29,981 |
|
|
|
Adjustments: |
|
|
|
|
Ecommerce losses |
|
1,052 |
|
|
501 |
|
|
|
Store closing and
impairment charges |
|
1 |
|
|
55 |
|
|
|
Pre-opening costs |
|
1,126 |
|
|
344 |
|
|
|
Total adjustments |
|
2,179 |
|
|
900 |
|
|
|
Adjusted
EBITDA |
$ |
32,932 |
|
$ |
30,881 |
|
For more information:
Linda L. Tasseff
Director, Investor Relations
(904) 858-2639
ltasseff@steinmart.com
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