On September 11, Stein Mart, Inc. announced that it received an expected letter from NASDAQ stating that the company was not in compliance with the market’s listing rules because it did not file its quarterly report on Form 10-Q for the second quarter as scheduled. August sales, however, suggest the stock market problem doesn’t reflect summer trouble with consumers.
In the second quarter, Stein Mart stated that it had completed the replacement of its legacy merchandise information system but that the conversion had delayed the accounting reconciliations for the validation of inventory and accounts payable balances that come from the new system. The letter is a standard NASDAQ document informing a company that it has 60 days to submit a plan to regain compliance and had no immediate effect on the listing or trading of the company’s common stock, Stein Mart noted.
In addition, the company is evaluating the control implications related to the error correction resulting from incorrect capitalization and amortization of certain software costs as well as software assets no longer in use. The company intends to file its Form 10-Q when the reconciliations and control evaluation are complete, well within the 60 day required period, it said.
In its latest financial announcement, for the four-week period ended August 25, Stein Mart reported that its comparable stores sales increased 5.6%. Total sales for the period were $79 million, an increase of 6.9% versus the 2011 month.
Linens, ladies’ career and casual sportswear and ladies’ petites outperformed the comp average for the month, Stein Mart related, while gifts, dresses and men’s underperformed. Geographically, sales advanced in every state with California performing better than the chain and Florida not as well.
“We are very pleased with our increased sales for August which was achieved with day to day regular merchandise selling and several smaller events where we attempted to replace some of the volume from last year’s August 12-hour sale, which we did not repeat this year,” said Jay Stein, interim CEO. “Our strong sales were for regular priced merchandise, including early receipts for fall, as well as clearance selling.”
Stein Mart operated 263 stores at the end of August compared to 260 at the same time last year. No stores were opened or closed during August.