Stein Mart 2010 Annual Report Download - page 2

2010 was a year of continuing progress for Stein Mart. We moved forward with the turnaround initiatives we began in 2008, strengthening
our position as a fashion-driven, value-oriented retailer, while positioning the Company for long-term growth. Our financial results reflect these
improvements. We posted our second consecutive year of increased profitability; we paid a special dividend of $0.50 per share, totaling $22
million, and we maintained a strong, debt-free balance sheet with fresh inventories and $80 million in cash at year-end.
Operating income increased to $53.1 million or $47.8 million as adjusted* from $34.6 million or $45.7 million as adjusted* in 2009,
while earnings per diluted share increased to $1.08 or $0.86 as adjusted compared to $0.54 or $0.71 as adjusted in 2009.
The primary drivers of the increased profitability were lower expenses and improvements in inventory management. In the past two years we
reduced SG&A expenses by over $100 million, while carefully maintaining the shopping experience our customers expect. We implemented
a new supply chain, closed underperforming stores and improved efficiency in all areas of the business. With our rigorous cost and inventory
controls in place, we are well-positioned to drive profitability as sales trends improve.
We continued to strengthen our management team with the addition of Brian Morrow as chief merchandising officer in early 2010 and
Gary Pierce as director of stores in mid-2010. Our leadership team is now in place with the right expertise and commitment to execute our
growth strategies.
Looking forward to 2011 and beyond, our top priority is increasing sales to fuel profit growth. While consistent comparable store sales growth
has taken longer to achieve than we would like, we saw an improving trend in 2010 and are confident that our initiatives are beginning to take
hold. Our strategy is straightforward: draw more customers to our stores and increase our share of their spending with distinctive merchandise at
great values, an outstanding shopping experience and targeted marketing.
Here are highlights of initiatives we have underway.
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with more on the way.
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regional merchandising, size optimization and more complex pricing strategies. We are also selectively opening new locations in existing
markets, relocating or closing underperforming stores and remodeling growth opportunity stores.
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We are working hard every day to delight our customers with exciting, fashion-right merchandise and strengthen our performance. We will
continue to manage our business conservatively and will closely monitor and react to the effects that higher fuel prices, apparel cost increases
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to deliver the long-term performance you expect.
In closing, let us take this opportunity to thank our more than 11,000 associates for their dedication to our customers and our Board for its
valuable guidance. We also thank you, our shareholders, for your confidence in our Company.
To Our Shareholders
*Please refer to Form 10-K Item 7 for a description of adjusted results
David H. Stovall, Jr.
President and
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Jay Stein
Chairman of the Board