Earnings in the third fiscal quarter ended November 1, 2014 at US apparel retailer, Stein Mart slipped in to black from red in the year ago quarter.
Third quarter of 2014 adjusted net income totalled $0.9 million or $0.02 per diluted share compared to adjusted net loss of $0.3 million or $0.01 loss per diluted share in 2013.
Total sales for the reporting quarter rose 4.5 per cent from the prior year quarter to $303.7 million, while comparable store sales increased 3.1 per cent.
Driven by higher mark-up, but offset by higher occupancy costs led to adjusted gross profit reach $80.2 million or 27.6 per cent of sales in the quarter under review.
SG&A expenses totalled $86.3 million in third quarter of 2014 primarily due to planned payroll hikes, new and relocated stores and higher store closing charges coming from more store relocation activity.
The effective tax rate for the first nine months of 2014 was 39.1 per cent compared to 39.4 per cent in 2013.
Cash at the end of the third quarter of 2014 amounted was $64.9 million, up as against $59.5 million at the end of the third quarter of 2013.
According to the retailer, the rise in 2014 over 2013 is after dividend payments and stock repurchases, as well as capital expenditures and increased investment in inventories.
Inventories rose 4.3 per cent at end of third quarter of 2014 to $343.7 million from $329.7 million at end of prior year third quarter.
Stein Mart operated 268 stores in the third quarter this year, up from 264 in corresponding quarter last year.
“While our 2015 store plan is not complete, we currently plan to open at least ten new stores, relocate two stores and close two stores next year,” Stein Mart said.
Stein Mart anticipates that new stores will increase sales an estimated 2.5 per cent above its comparable store increases for the second half of the fiscal year.
It now expects its full year gross profit rate to be slightly higher than the 29.1 per cent reported in 2013.
Capital expenditures for 2014 are now expected to be approximately $41 million and effective tax rate is still expected to be around 39 per cent.
"We are pleased with our third quarter 3.1 per cent comparable sales increase, improved adjusted earnings and the sales boost from our 2014 new and relocated stores for the quarter," said CEO, Jay Stein.
"This was a great way to start our fall season, as we turn our attention to the very important fourth quarter," he added. (AR)
