Stein Mart can't keep up momentum

Stein Mart says warm weather is to blame for its lackluster performance in the third quarter as the company makes plans to increase promotions to improve its top-line growth.



The off-price retailer said that for the third quarter ended Oct. 31, same-store sales fell 2.3%. Total sales also dropped 1% to $300.7 million during the same time period. Profits dipped to $82.2 million, or 27.3% of sales compared to $84.6 million or 27.8% of sales during the same time period in 2014.



“Our third quarter sales were severely impacted by unseasonably warm weather. We are working to address our sales and promotional strategies for the fourth quarter to get back to more acceptable top-line results,” said Jay Stein, CEO. “Our sales-focused initiatives have produced strong results for more than three years and it is important that we continue to make the right long-term investments. As an example, our new store growth is already giving us excellent returns with our fall store openings delivering outstanding results.”



The company had 274 stores at the end of the third quarter compared to 268 last year. Stein Mart plans to open at least 12 new stores next year with five new stores opening in the spring and the remainder in the fall.



Stein Mart now expects same-store sale to increase 5% in the fourth quarter. The company also anticipates its full year gross profit rate to be lower than the 29.3% reported in 2014 ,which reflects higher pre-opening occupancy costs for new stores opening in first quarter 2016 and a more promotional fall selling season due to the slow start.