Fashion retailer Stein Mart Inc has reported a "disappointing" second quarter with earnings and sales both down, and has lowered its third quarter outlook.

For the 13 weeks to 4 August, profit tumbled 73% to $2.2m or $0.05 per diluted share, from $8.3m or $0.19 per diluted share in the same period last year.
Net sales fell 1.7% to $330.7m from $336.3m, and same-store sales slipped 1.2%.
Due to higher markdowns and increased buying costs, gross profit declined to $86.2m or 26.1% of sales compared to $94.0m or 28.0% of sales in the same period last year.

"We were disappointed by our performance in the second quarter, and remain concerned about the constrained selling environment in an uncertain economy," said Michael D. Fisher, president and chief executive officer of Stein Mart, Inc.

"We are taking a very conservative posture in terms of inventory management and continue to look for every opportunity to improve our productivity."

Management expects comparable store sales to decrease 2-4% for the third quarter, and a loss of $0.03 to $0.06 per share.

For the six month period, the company's profit fell to $10.3m or $0.24 per diluted share from $15.9m or $0.36 per diluted share in 2006. Net sales increased 0.8% to $706.9m but comparable store sales dropped 1.6%.