Stein Mart announced financial results for the second quarter ended July 30, 2016. Net income was $3 million or $0.06 per diluted share compared to net income of $4.1 million or $0.09 per diluted share in 2015.
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For the first six months of 2016, net income was $16.3 million or $0.35 per diluted share compared to $17.7 million or $0.38 per diluted share in the same period in 2015.
The first six months of 2016 includes $1.7 million, or $0.02 per diluted share, higher expense for actual and anticipated legal settlements.
Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) for the first half was $48.7 million compared to $46.9 million in 2015.
Total sales for the second quarter of 2016 increased 2.6 percent to $319.8 million, while comparable store sales decreased 1.4 percent. For the first six months of 2016, total sales increased 1.6 percent to $675.5 million, while comparable store sales decreased 2.5 percent.
Gross profit for the second quarter of 2016 was $89.4 million or 28.0 percent of sales compared to $88.9 million or 28.5 percent of sales in 2015.
The decrease in the second quarter gross profit rate is due to higher markdowns and higher occupancy costs.
Gross profit for the first six months of 2016 was $198.3 million or 29.4 percent of sales compared to $197.3 million or 29.7 percent of sales in 2015.
The decrease in the gross profit rate for the first half was the result of higher occupancy costs and the higher second quarter markdowns.
Selling, general and administrative (SG&A) expenses for the second quarter of 2016 were $83.8 million or 26.2 percent of sales compared to $81.5 million or 26.2 percent of sales in 2015. The $2.3 million increase in SG&A expenses is primarily the result of higher operating expenses for new stores.
For the first six months, SG&A expenses were $170.3 million compared to $167.2 million in 2015.
SG&A expenses for the first six months include $1.7 million higher expense for actual and anticipated legal settlements. Excluding these costs from each period, SG&A expenses for the first half would be $168.5 million or 24.9 percent of sales compared to $167.1 million or 25.1 percent of sales in 2015.
Inventories were $280 million at the end of the second quarter of 2016 compared to $277 million at the same time last year. Average inventories per store were down 4 percent from last year.
Interest expense for the second quarter of 2016 was $0.9 million compared to $0.8 million in 2015. For the first six months, interest expense was $1.8 million compared to $1.5 million last year.
Borrowings under our credit facilities were $167 million at the end of the second quarter. Unused availability was $91 million at the end of the quarter. ■