• Q2 profit jumped 47.8% to $3.4m versus $2.3m
  • Sales rose 3.8% to $291m from $280.4m
  • Gross margin improved to 27.6% versus 26.3%

Higher sales and improved margins helped off-price fashion retailer Stein Mart to book a 47.8% increase in second quarter profit.

The company today (22 August) said net income reached US$3.4m for the three months to 3 August, compared to $2.3m in the same period of last year.

Total sales rose 3.8% to $291m from $280.4m, while comparable store sales grew 6.4%. Gross margin improved to 27.6% versus 26.3% last year, due to lower markdowns and slightly higher markup.

CEO Jay Stein said the sales increase was driven by its "great merchandise, brands and pricing", and added: "We've said for a long while that increases in sales and margin will leverage against our lean expense structure resulting in higher earnings growth. This is now happening."

During the first half, net income jumped 38.2% to $18.1m from $13.1m, while total sales reached $612.3m, up 3.8% from the prior year period. Comparable store sales were up 3.6%.

Stein added: "Supported by our strong first six months results, we are entering the fall season with optimism about our ability to grow sales.

"As we begin our third quarter, we now believe that our gross margin rate will continue to be better than last year and that our expense structure will allow much of our higher gross margin dollars to drop to our bottom line."