Stein Mart Posts Flat Comps for December

Stein Mart, Inc. saw sales for the month of December increase 2.1% to $216.2 million from $211.8 million during last year's month. Comparable store sales for the month were flat to last year.

Quarter-to-date and year-to-date sales were as follows (dollars in millions):

                                            Total Sales      Percent Change
                                                            Total  Comparable
    Fiscal Period:                          2006    2005    Sales  Store Sales
    December (5 weeks)                   $  216.2 $ 211.8   2.1%      0.0%
    Quarter to date (9 weeks)            $  360.9 $ 347.1   4.0%      1.5%
    Year to date (48 weeks)              $1,401.2 $1,401.4  0.0%     (1.2)%

During December, the best sales trends were in certain categories of ladies' ready-to-wear (casual sportswear, special sizes, intimate apparel and social occasion dressing) and in men's sportswear. Geographically, the strongest sales were in the West and in the Company's Northern tier of stores, with continued pockets of strength along the Gulf Coast.

“We are disappointed with our flat comparable store sales in December,” noted Michael D. Fisher, president and chief executive officer of Stein Mart, Inc. “The early weeks were negative, but sales improved as Christmas approached and were capped by a strong post-Christmas finish, although we took aggressive markdowns of seasonal and cold-weather merchandise to liquidate inventories.”

Guidance

While the company still anticipates January comparable store sales will be approximately flat to last year, the combination of aggressive markdowns in December and January with lower-than-planned sales in December will negatively impact profitability for the quarter. Management now expects earnings per share of approximately $0.38-$0.40 for the fourth quarter of fiscal 2006 as compared to $0.48 per share in the fourth quarter of 2005. Fourth quarter 2005 results were positively impacted by $3.4 million pre-tax from a better-than- expected inventory shrinkage performance, $1.9 million pre-tax for insurance recovery related to hurricane damages, and a reduction in the effective tax rate to reflect non-taxable interest income. There was also a pre-tax charge of $1.8 million for store closing and asset impairment expenses in the fourth quarter of 2005.

Note: Fiscal 2006 is a 53-week year ending February 3, 2007. January retail sales will be announced on February 8, 2007. Full financial results for the fourth quarter and fiscal year 2006 will be reported before the U.S. financial markets open on Wednesday, March 21, 2007.

New General Merchandising Manager named

Martha Withers has been named General Merchandising Manager (GMM) for ladies' apparel, including Boutique, dresses and intimate apparel. Before joining Stein Mart, Ms. Withers was Senior Vice President, GMM for misses & special size sportswear for Robinsons-May Department Store Company in Los Angeles, where she worked for 25 years in various merchandising capacities. Ms. Withers will report to William A. Moll, executive vice president and chief merchandising officer.