• Q2 earnings fall to US$1.7m
  • Sales grow 2.5%

Off-price fashion retailer Stein Mart said it has a number of important initiatives in place to grow its bottom line as it revealed a drop in second-quarter earnings.

In the three months ended 2 August, net income dropped to US$1.7m from $3.4m a year earlier.

The results included $2.1m higher healthcare costs and $0.6m higher pre-opening costs on the prior year. These were due to unusually unfavourable claims experience this year compared to favourable claims experience in last year's second quarter.

Adjusted for costs, net income was down 37.8% to $2.8m.

"Despite a challenging first half of the year with weather impacting sales, we have a number of important initiatives in place," said CEO Jay Stein. "Key among these is our growth focus, as we open more new and relocated stores this fall and continue to build our e-commerce business. These and our other strategies play a very important role in our long-term business development."

Total sales for the quarter were up 2.5% to $298.2m, while comparable store sales increased 1.3%.

Stein Mart is estimating new stores to increase sales an estimated 1.5% above our comparable store increases for the full year and 2.5 percent in the second half.