Stein Mart Q1 profit more than doubles on cost cutting

Jacksonville, Fla. Stein Mart said Thursday that its profit more than doubled in the first quarter as it significantly reduced expenses.

Stein Mart reported earnings of $16.1 million for the three months ended May 2, compared to $7 million in 2008. As previously reported, net sales for the first quarter decreased 9.2% to $319.6 million and comp-store sales dropped 8%.

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% 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, the company said.

"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," said David H. Stovall Jr., president and CEO. "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."

During the first quarter of 2009, the company opened one store and closed two. At the quarter’s end, there were 275 stores in operation compared with 284 stores at the same time last year.