Following a transition period when Stein Mart replaced its CEO, the off-price retailer reported a comps decline and wider net loss in the third quarter.
Net loss for the third quarter ended October 29 was $11 million or $0.24 per diluted share compared to a net loss of $0.2 million or $0.01 per diluted share in 2015. Total sales for the third quarter of 2016 decreased 0.4% to $299.5 million, while comparable store sales decreased 4.6%.
“We introduced new marketing and promotional changes, as well as new merchandising strategies, during the quarter which were not embraced by our customer. The promotional changes were particularly impactful on our ability to clear spring merchandise on a timely and profitable basis during the quarter. As a result, we took significant markdowns to liquidate spring inventories. The lower gross profit rate also reflects higher occupancy costs, mostly from new stores, which negatively leverage on lower comparable store sales,” said Hunt Hawkins, interim CEO, Stein Mart. “As we look forward to the fourth quarter, we have returned our marketing and promotions to what has worked in the past as we explore a better strategy, but the challenging retail environment will likely continue to drive higher markdowns as we diligently work to enter 2017 with the right inventories. A bright spot in this environment is our new fall stores, which are performing above plan.”
Stein Mart operated 290 stores at the end of the third quarter compared to 274 last year.
