Net sales for the first quarter were $380.7 million, a 4.7% increase over the $363.6 million in net sales for the first quarter of 2004. Comparable store sales increased 3.2% from the first quarter of 2004 to the first quarter of 2005.
"First quarter sales were driven by continued strength in ladies' apparel and accessories, and menswear, and by higher-than-expected full-priced selling," said Michael D. Fisher, president and chief executive officer. "We believe our first quarter performance validates our continued focus on improved productivity which, in turn, produces substantially greater profit on a more normalized sales increase."
Selling, general and administrative (SG&A) expenses were $89 million or 23.4% of net sales as compared to $83.5 million or 23% of net sales during the prior year's first quarter. This included store-closing charges of $1.3 million in this year's first quarter and $0.4 million in last year's first quarter. Executives attribute the higher expenses to increased advertising and pre-opening expenses.
Gross profit increased to $111.7 million, or 29.3% of net sales in the first quarter of 2005 compared to $98.7 million, or 27.2% of net sales in the same period of 2004. Gross profit was favorably impacted primarily by increased mark-up and decreased markdowns.
Inventories were up at the end of the first quarter because of certain planned buys as well as some opportunistic purchases. Stein Mart management says it intends to enter the fall selling season with slightly more inventory than last year in order to take advantage of seasonal selling opportunities.
During Q1, Stein Mart opened two new stores--Orlando, FL and Beaufort, SC--and closed five stores, for a quarter-end store count of 258. Two additional stores (Ocean, NJ and Boynton Beach, FL) opened this month.
Citing external issues including certain construction delays, Stein Mart has revised its store plan for 2005. Company executives now expect a total of eight to nine new stores, including one relocation, to open this year, with some stores that were originally planned for 2005 now expected to open in 2006. A total of seven stores will close in 2005.
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