Stein Mart 2012 Annual Report Download - page 2

To Our Shareholders
Jay Stein
Chairman of the Board and
Chief Executive Ofcer
I am delighted to share with you our outstanding 2012 nancial performance which was driven by sales increases
that gained momentum through the year. As promised, we have returned to the original merchandising strategies
that made this company great. Our 2012 results show just how well we executed these strategies.
Our goal for 2012 was to establish a healthier sale and gross margin base from which to grow our business, and
that’s exactly what we did. We did it by getting back to the things that Stein Mart has always been known for -
a compelling assortment of beautiful merchandise at great prices.
Sales strengthened throughout 2012 peaking with a comparable store sales increase of 6.0 percent during our very
important fourth quarter. Equally signicant is the fact that these sales were achieved with increased merchandise
margins. Our 2012 comparable store sales growth was the best we have seen in years, driven by exciting
merchandising in all areas. While I am proud of our results across the entire store, I am particularly pleased with
our reinvented Home area, which has returned to being the top performer it once was, and our further improved
offering of designer and national brands. Over the past three years we have added an impressive 350 brand names
and nearly doubled their sales impact. Again, this is all part of our returning to a merchandising strategy that has
worked so well for us in the past and I’m happy to say that “we are back!”
As a result of our continued strong nancial position, we paid a special one-dollar per share dividend of nearly
$44 million in 2012. Your Board of Directors and I were extremely pleased to return this value to our shareholders.
Today, our nancial position remains strong.
We believe that investing in our future through smart capital spending is important to our success. Over the past
three years, we have invested over $110 million in our systems infrastructure and stores. We plan to invest another
$34 million in 2013, including projects to grow our e-commerce business and improve our supply chain distribution
network. We are excited about our future growth opportunities with e-commerce and our ability to manage our
inventories even better through an improved company-operated supply chain.
As we begin 2013, our merchandising strategy has not changed. Our goal is to build on the sales increases
we experienced in 2012 by deepening our relationship with existing customers, attracting new customers and
increasing our share of their spending through our timeless formula of fashion, brands, quality and price. On a
longer-term basis, we also want to drive growth by adding to our store base. We have a renewed focus on opening
new stores in existing markets where we know we can be successful and can gain efciency in advertising and
operating expenses.
I want to thank our shareholders for your patience and continued support during the
communications blackout during our restatement process. We are thankful that this is now
behind us and you can see that our results are stronger than ever. I would also like to thank
our Board of Directors for their strong and sensible guidance during this past year.
In closing, let me take this opportunity to thank our nearly 11,000 associates for all their
hard work that helped us achieve the results we enjoyed in 2012. Our work has really just
begun, as we are now driven to build upon this year’s successes. It has been my pleasure
to work with all of you and I look forward to continuing to lead our company, along with our
great executive team.