Stein Mart, Inc. reported total sales and comparable store sales for the fiscal period ended October 2, 2004, as follows (dollars in millions):
Total Sales Percent Change
Fiscal Period: Total Comparable
2004 2003 Sales Store Sales
September (5 weeks) $128.7 $124.4 3.4% 5.2%
Year-to-date (35 weeks) $905.5 $851.5 6.3% 9.3%
Total Sales Percent Change Fiscal Period: Total Comparable 2004 2003 Sales Store Sales September (5 weeks) $128.7 $124.4 3.4% 5.2% Year-to-date (35 weeks) $905.5 $851.5 6.3% 9.3%
Ladies' and men's sportswear and ladies' accessories were the best performing categories of merchandise. Geographically, the strongest areas were the Eastern Seaboard, Southern California and Southeast Texas. Sales at a significant number of stores in the Southeast were negatively impacted during the period because of hurricane activity. Excluding those stores impacted by the hurricanes, September comparable store sales increased 8.6%.
“We estimate that September's loss of revenue due to hurricane activity was in excess of $5 million,” noted Michael D. Fisher, president and chief executive officer of Stein Mart, Inc. “Without minimizing the negative impact of this protracted business disturbance, it is important to note that our core business was strong and we were very pleased with the enthusiastic customer response to our new fall assortments.”
Stein Mart operated 258 stores on October 2, 2004 as compared to 263 stores at the same time last year.
Over the five weeks in September, Hurricanes Frances, Ivan and Jeanne repeatedly threatened and eventually moved throughout the Southeast. There were 53 Stein Mart stores closed for one or more days during the month.
All Stein Mart stores are open and operating, with the exception of the heavily damaged Stuart, FL location. Stein Mart's loss of merchandise, interruption of business and restocking costs for this store will be substantially covered by insurance. It is anticipated that the Stuart store will reopen in early December.
Update to quarterly guidance
Management now expects comparable store sales for the third quarter to increase at the low end of the previously stated range of 6-8%.
Because the storms began prior to Labor Day and continued through several key clearance weekends, the Company's scheduled liquidation of spring/summer merchandise decelerated. A more costly-than-planned markdown cadence was initiated to insure targeted inventory freshness levels. Management believes that this strategy was successful and that inventories are now appropriate for the most important part of the fall selling season.
The combination of lower sales and increased markdowns to move inventory will negatively affect margins for the third quarter, resulting in an anticipated loss of $(0.06) to $(0.08) per share for the period.