Stein Mart Inc (NASDAQ:SMRT) posted financial report for the fourth quarter closed February 3, 2018. Gross profit for Q4 2017 came at $102.4 million versus $87.9 million in 2016. The improvement in the gross profit was mainly due to an increased merchandise margin rate from lowered markdowns and improved inventory productivity.
The buzz
Hunt Hawkins, the CEO of Stein Mart, expressed that 2017 was a year of change that positions them for the imminent period. They have updated their assortment and enhanced inventory productivity via lowered inventory levels, revisions to receipt flow and improved markdown practices.
Hawkins expressed said that they also introduced a new advertising campaign, cut capital spending and expenses, and expanded e-Commerce by brining ship-from-store fulfillment. These changes enabled them to achieve strong adjusted operating income in Q4 2017. Adjusted operating income surged $14.3 million from last year led by gross profit expansion and greater growth in their merchandise margins.
The CEO of Stein Mart expressed that they are exhilarated by the sales trend they noted in February and early March led by extremely strong regular-priced selling, especially in their resort markets and warm weather where spring selling starts. These major indicators give them assurance that comparable sales trends will radically improve in Q1 2018 as spring regular-price selling grows in other markets. With better comparable sales in the first quarter, their continued expense control and gross profit expansion, they anticipate first-half operating income in surplus of $8 million, a big part of which will happen in the first quarter.
For Q1 2018, Stein management anticipate several factors to influence their business. The company project flat to low single-digit surges in comparable sales led by increased regular-price selling. They anticipate gross profit expansion of around 200 basis points. SG&A expenses are anticipated to be slightly lower, including higher ecommerce and advertising costs.
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