=Stein Mart (SMRT) reported earnings on Wed 17 May 17 (a/h)

** charts after earnings **

 

Stein Mart misses by $0.07, misses on revs; co lowers gross profit rate, now sees it significantly less than previously expected, co also suspends quarterly dividend and reduces CapEx:

• Reports Q1 (Apr) earnings of $0.08 per share, $0.07 worse than the two analyst estimate of $0.15; revenues fell 5.2% year/year to $337.3 mln vs the $362.21 mln two analyst estimate
  • Comparable store sales decreased 7.6 percent primarily due to lower traffic.
    Ecommerce sales were up 38 percent over last year's first quarter.
• Co continues to expect its total sales to be at least 4% above its comparable store sales for the year due to net new stores and this year's additional 53rd week
• Co now expect its gross profit rate will be about the same as the fiscal 2016 rate
• This is significantly less than previously estimated primarily due to higher first and second quarter markdowns to reduce inventories for the remainder of the year
  • Co said, "If first quarter sales trends continue into the second quarter, we estimate that our loss per share will be in the range of $0.20 to $0.25 for the second quarter." Consensus calls for a loss of ($0.02)
  • Co said, "We continue to experience softer than planned store traffic and sales. As a result, markdowns were significantly higher for the quarter despite our focus on inventory management. Given the uncertain retail environment, we are being more conservative planning fall, keeping a higher percentage of our buying in reserve to opportunistically take advantage of any sales upside. We expect to see additional inventory reductions as the year progresses," said Hunt Hawkins, Chief Executive Officer
• Suspending the $0.075 quarterly dividend will free up approximately $14 million of cash to apply against debt on an annual basis
• Capital expenditures totaled $7.2 million for the first quarter of 2017 compared to $11.3 million in 2016. Planned capital expenditures for fiscal 2017 have been decreased to ~$24 million or $21 million net of tenant improvement allowances. Capital expenditures were $42 million or $36 million net of tenant improvement allowances in fiscal 2016.