Stein Mart sales and earnings were hit hard in the coronavirus-impacted first quarter, and the off-price retailer said it was continuing to explore strategic alternatives.
First quarter results were impacted by the temporary closure of all stores on March 19 due to the COVID-19 pandemic. Beginning April 23, the Company began the staggered reopening of stores. All stores were reopened as of June 15 and are operating with reduced hours.
Net loss for the first quarter of 2020 was $65.7 million or $1.38 per diluted share compared to net income of $4 million or $0.08 per diluted share for the first quarter of 2019. First quarter 2020 results include non-cash pre-tax asset impairment charges of $10.3 million or $0.22 per diluted share.
Net sales for the first quarter of 2020 were $134.3 million compared to $314.2 million for the first quarter of 2019. Omni sales for the first quarter increased 17% over last year.
“As our stores reopened, we have seen traffic steadily increase and omnichannel sales remain strong. However, while sales are exceeding our expectations, they continue to be down to last year and we expect it will take some time for them to fully recover. COVID-19 has put a strain on our credit facilities, as we are borrowing seasonally higher amounts to cover cash shortfalls from lower sales,” said Hunt Hawkins, CEO, Stein Mart. “Although we are facing a period of uncertainty regarding the continued impacts of COVID-19, we have charted a path forward to proactively address these near-term challenges and preserve our business. While these challenges are significant, they are not insurmountable but will require much from our teams, as well as the continued support of our external partners.”
The company said its revenues, results of operations and cash flows have been materially adversely impacted which raises “substantial doubt about its ability to continue as a going concern over the next twelve months.” In response, the company is taking aggressive actions to preserve ongoing operations and liquidity. The company said it is also actively exploring additional sources of financing and other strategic alternatives, including a sale of the company.