Operational Costs Erode Stein Mart Q2 Profits

For the second quarter, ended August 2, Stein Mart, Inc. posted net income of $1.7 million, or four cents per diluted share, versus $3.4 million, or eight cents per diluted share, in 2013. Second quarter adjusted net income came in at $2.8 million, or six cents per diluted share, compared to $4.5 million, or 10 cents per diluted share, in the 2013 period, Stein Mart stated.

Total sales in the second quarter gained 2.5% to $298.2 as comparable store sales increased 1.3% versus last year’s period, Stein Mart noted.

Second quarter 2014 results include $2.1 million in higher healthcare costs and $600,000 higher pre-opening costs versus last year’s period, Stein Mart asserted. The increases totaled $1.6 million after tax or four cents per diluted share, according to the company. The higher healthcare arose from unfavorable claims experience in this year’s second quarter compared to favorable claims experience in last year’s period.

“Despite a challenging first half of the year with weather impacting sales, we have a number of important initiatives in place,” said Jay Stein, the retailer’s CEO, in announcing the financial results. “Key among these is our growth focus, as we open more new and relocated stores this fall and continue to build our e-commerce business. These and our other strategies play a very important role in our long-term business development.”