For the first quarter ended May 2, 2009, Stein Mart earned $16.1 million or 38 cents per diluted share as compared to $7.0 million or 17 cents per diluted share in 2008. As previously reported, net sales for the first quarter decreased 9.2% to $319.6 million from $352.1 million the previous year and comparable store sales decreased 8.0% from the first quarter of 2008.

Gross profit decreased to $96.8 million from $97.7 million in 2008. As a percent of net sales, gross profit increased to 30.3 percent from 27.8% in the same period last year. The increase in the gross profit rate resulted from increased markup and decreased markdowns, slightly offset by higher occupancy costs.

Selling, general and administrative (SG&A) expenses were $79.9 million or 25.0% of net sales as compared to $91.5 million or 26.0% of net sales during the same period last year. The $11.7 million decrease in SG&A resulted primarily from reduced payroll expense in stores and in the corporate office, and from lower depreciation expense.

The effective tax rate for the first quarter of 2009 was 25.8% compared to 40.5% last year. The lower rate in the current quarter resulted from the reversal of a portion of the valuation allowance for deferred tax assets using the discrete period method.

“Despite a very difficult sales environment, first quarter earnings improved due to tightly controlled inventories that enhanced merchandise margins, and significant expense reductions; these initiatives produced a positive cash flow of $32 million and allowed us to end the period debt free,” commented David H. Stovall, Jr., president and chief executive officer of Stein Mart, Inc. “While our conservative outlook regarding the macro environment persists, we believe our re-focused brand strategy and the new marketing initiatives are beginning to gain traction, and will be key to our long-term success.”

Store network

During the first quarter of 2009, a new store opened in Houston, Texas and two existing locations in Atlanta closed. At May 2, 2009, there were 275 stores in operation as compared to 284 stores at the same time last year.

 



                                   Stein Mart, Inc.
                             Consolidated Balance Sheets
                                     (Unaudited)
                        (In thousands, except for share data)

                                                 May 2,  January 31, May 3,
                                                  2009      2009      2008
    ASSETS
    Current assets:
    Cash and cash equivalents                    $19,409   $88,903   $22,473
    Trade and other receivables                    8,604     9,011    11,493
    Inventories                                  209,573   207,139   280,573
    Income taxes receivable                       16,895    24,439    10,060
    Prepaid expenses and other current assets     13,174    12,089    15,309
       Total current assets                      267,655   341,581   339,908
    Property and equipment, net                   83,042    86,321   109,948
    Other assets                                  17,225    21,988    33,535
       Total assets                             $367,922  $449,890  $483,391

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Accounts payable                             $63,085   $55,683   $80,392
    Accrued liabilities                           77,967    79,794    73,774
       Total current liabilities                 141,052   135,477   154,166
    Notes payable to banks                             -   100,000    40,000
    Other liabilities                             23,637    28,063    28,864
       Total liabilities                         164,689   263,540   223,030

    COMMITMENTS AND CONTINGENCIES
    Stockholders' 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; 42,656,332, 42,655,544
     and 42,078,878 shares issued and
     outstanding, respectively                       427       427       421
    Additional paid-in capital                    10,791     9,986     6,489
    Retained earnings                            191,238   175,152   253,451
    Accumulated other comprehensive income           777       785         -
       Total stockholders' equity                203,233   186,350   260,361
       Total liabilities and stockholders'
        equity                                  $367,922  $449,890  $483,391