Stein Mart Comps Fall 9.1% in September; Cuts Guidance

Stein Mart September sales declined 3.2% to $127.2 million compared to $131.4 million for the same period last year. Comparable store sales decreased 9.1% for the same period.

                               Total Sales (in millions)  Percent Change

                                                        Total  Comparable

                                     2007      2006     Sales  Store Sales

    September (5 weeks)            $127.2    $131.4    (3.2)%    (9.1)%

    Quarter to date (9 weeks)      $219.7    $227.1    (3.3)%    (7.5)%

    Year to date (35 weeks)        $926.5    $928.2    (0.2)%    (3.1)%

During September, comparable stores sales were positive only in Intimate Apparel, although certain sub-categories within ladies' apparel showed year- over-year improvement, as did fall and holiday seasonal goods in the Home division. Geographically, all regions reported negative comparable store sales; however, the Mid-Atlantic States and metropolitan Houston and Dallas markets performed somewhat better than the Company trend.

“Our performance in September was unacceptable,” commented Stein Mart's newly appointed president and chief executive officer, Linda M. Farthing. “While there are certainly challenges in the macro environment, our focus right now is to scrutinize every aspect of our business for opportunities to generate sales, reduce expenses and increase productivity this fall.”

Fall 2007 Store Opening Schedule

On October 6, 2007, there were 271 Stein Mart locations, compared to 261 stores last year. Six stores are expected to open in (fiscal) October, and four stores are planned to open in November, completing Stein Mart's 2007 store-opening schedule. One store (Franklin, NJ) that was anticipated to open this fall has been moved to Spring '08. At the end of this year, a total of 14 stores will have opened, two will have been relocated and two closed, bringing the year-end store count to 280 stores, compared to 268 at the end of fiscal 2006.

Updated Guidance

With the significant shortfall in sales quarter-to-date, management now expects comparable store sales to decrease 6-7% for the third quarter. Greater markdowns will be needed to clear inventory this quarter, so gross margin will be further compromised. Accordingly, management now expects the Company's loss for the third quarter ending November 3, 2007 to be between ($0.15) and ($0.18) per diluted share, which includes approximately ($0.03) per share, pre-tax, for costs associated with the transition of the president/CEO position as outlined in the SEC Form 8-K filed on October 5, 2007.