Stein Mart 2013 Annual Report Download - page 2

2013 was an exceptional year for Stein Mart and one that we can be extremely proud of. Our focus on offering designer and
national brands at discount prices every day, along with the success of our sales-focused initiatives, continued to drive our
comparable store sales growth and nancial results.
Solid 2013 Sales and EPS Growth Topped 2012
During 2013, we accomplished our goal to build on the sales increases that we experienced in 2012. We had comparable
sales increases in all 2013 quarters, adding to a run of positive comps which began in the second quarter of 2012.
We ended the year with a 3.7% comparable sales increase which, along with improved merchandise margins, drove
adjusted diluted earnings per share up 40% over last year’s adjusted earnings.
Our healthy nancial position and condence that operations will continue to generate signicant cash ows directed us
to resume our quarterly dividend in 2013. After investing in capital and other key initiatives, as well as paying dividends,
we ended the year with $67 million of cash – a more than substantial amount to continue to grow our business.
Key Initiatives – Investments in the Future
I am very excited about the improvements we made in our business in 2013. We successfully completed a number of
initiatives and investments for the future. First, we enhanced our merchandise brands and did an outstanding job promoting
our offerings with the highest quality and most effective marketing pieces that we have ever produced. Second, we
continued to grow our credit card program after adding our private label card in mid-2012. This program not only increases
sales, but provides us with a channel to deepen our relationship with our customer. Third, in September we launched our
highly anticipated online store. Our e-commerce site is just beautiful and is the perfect stage to showcase our merchandise
and attract new customers. We also seamlessly took our supply chain distribution centers in-house to provide us future
cost savings and operational opportunities. Lastly, we worked on our very exciting 2014 store expansion plan which we
announced in February. This is our most aggressive store opening plan in more than ten years with 16 new and relocated
stores to even better serve our customers and grow returns for our shareholders.
2014 and Longer Term
As a business, our goals have changed over the post-recession years from expense control and closing underperforming
stores in the earlier years to the sales and merchandise margin improvements of 2012 and 2013. We successfully
accomplished all of these goals and are now fully focused on growing our sales base to increase productivity and
protability. We are condent in our ability and opportunities to increase sales because of the investments that we have
made in our future. In 2014, and longer term, the goals that underlie our sales focus are:
• Offering the best designer and national brands. We believe that our quality name brands along with a small but
distinctive selection of private labels, including our new Nina Home, differentiate Stein Mart from other off-price retailers
and will continue to prove successful for us.
• Growing our very important e-commerce business. The key to our 2013 launch was that
the site looked great and functioned well. As we enter our rst full year, we are now working
to enhance the shopping experience, including adding a mobile app, and increase trafc to
the site. This is a signicant opportunity for us on a longer-term basis.
• Expanding our credit card program. Adding our private label card has been, and is,
a tremendous sales-driving opportunity. Our credit card penetration, as expected,
is on the rise.
• Expanding our store base. We understand that increasing our number of stores is an
important part of our sales growth strategy. We have numerous opportunities in existing
and new markets and our 2014 store opening plan is just the beginning!
In closing, I’d like to thank our outstanding team, who executes our strategies so well.
This is our most experienced and high-performing management team we have ever had
and they are a big reason why we have, and will continue to have, success.
To Our Shareholders
Jay Stein
Chairman of the Board and
Chief Executive Ofcer