Q1 Reports: Stein Mart, Aeropostale, Wet Seal, Zumiez, New York & Co.

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Stein Mart books 11.2% rise in Q1 earnings

Jacksonville, FL–Stein Mart Inc. reported Thursday a “solid” first quarter after improved sales and margins helped the discount retailer to an 11.2% rise in earnings.

For the quarter ended April 30, Stein Mart reported a profit of $15.9 million, or 35 cents a share, up from $14.3 million, or 32 cents a share, a year earlier. Excluding an after-tax gain of 3 cents to correct an error in the company’s credit-card reward liability, earnings were 32 cents.

Analysts’ average estimate expected earnings of 31 cents.

Total sales edged up 0.8% to $303.5 million as same store sales increased by 1.5%. Strongest sales were in its Florida, Texas and western stores, but adverse weather hurt its performance in its Midwest and northern markets. Gross margin edged up to 29.6% from 29.1%.

“Customers responded positively to our growing assortment of designer labels and brands at great values,” said David Stovall Jr., ceo.

The company raised its capital spending plans for the year by $5 million to between $30 million and $35 million.


Q2 Profit Slump at Aeropostale

New York—Teen-oriented Aeropostale saw its first quarter profit slump, with comparable store sales down 7%.

For the first quarter, Aeropostale’s net income declined 64 percent to $16.4 million from $45.4 million in the year-ago period, the company said Thursday. Earnings per share for the quarter dropped to $0.20 from $0.48 last year.

Total sales grew 1% to $469.2 million from $463.6 million in the year-ago quarter. Comparable store sales fell 7% versus an 8% increase last year.

Gross margin plummeted to 29.1% of sales from 39.4% last year. Income from operations registered a similar drop to 5.9% of sales from 16.2% of sales last year.

E-commerce sales, however, were up 18% to $28.2 million, and the company said it expected second quarter earnings per share of 11 to 16 cents s share. Analysts’ average estimate expected second quarter earnings of 27 cents a share.

“Our outlook for the second quarter reflects our plans to aggressively clear through spring inventories to position ourselves appropriately for the important back-to-school selling season,” said Thomas Johnson, ceo.

For the full year, citing an uncertainty surrounding the retail environment in second half, Aeropostale said, “The company is not reiterating or providing an update to its previously issued full year guidance at this time.”


Wet Seal Q1 profit surges 158%

Foothills Ranch, CA–First quarter profit at The Wet Seal Inc has more than doubled thanks to higher sales and lower interest charges, but the teen retailer cautioned that marketing costs would eat into second quarter earnings.

The company said Thursday it earned $8 million, or 8 cents per share, for the quarter meeting analysts’ average expectations That’s up from $3.1 million, or 3 cents per share, in the same quarter last year, which includes several special items. Adjusting for those, the company earned 6 cents per share last year.

Total sales rose 13% to $156 million, just below analysts’ average expectations of $156.8 million. Same store sales increased 7%.

“We ended the quarter in April with our fifth month of positive comparable store sales in the last six months, reflecting our efforts to improve merchandise content across all categories in both brands,” noted Susan McGalla, ceo.  “As of quarter-end, inventory per square foot decreased 1.9% versus the prior year quarter, with Wet Seal down 3.0% and Arden B up 5.1%. We believe our inventory levels and content provide opportunity for continued comparable store sales growth into the second quarter.”

The retailer said it is currently implementing a market research study, improving store operations, reworking its in-store merchandise displays as part of efforts to increase sales. These costs are likely to push second quarter earnings down to 1 cent to 2 cents a share, compared with 2 cents a share a year earlier.

Wet Seal also said it increased its stock buyback plan by $31.7 million to $56.7 million, about 10% of the company’s total market cap. The repurchase program will be funded using existing cash on hand.

Zumiez reverses Q1 loss with sales surge

Everett, WA–Zumiez swapped last year’s first quarter loss for a $1.9 million net profit as sales surged up 18.8%, gross margins increased and expenses lowered.

The sports apparel and accessories retailer said Thursday its net income for the quarter was $1.9 million or 6 cent per share, compared to a net loss of $1.9 million or 6 cents per share last year. The performance beat analysts’ average estimates expecting 2 cents per share.

Total net sales for the quarter grew 18.8% to $105.9 million from $89.1 million last year and edging ahead of analysts’ average estimate of $105.36 million. Comparable store sales advanced 12.6% on top of an increase of 9.1% in the first quarter last year

Gross margins improved to 31.6% from 28.6% last year, while selling, general and administrative expenses as a percent of sales declined to 29.2% from 32.3% last year.

Looking ahead, Zumiez expects second quarter net income in the range of about 2 to 4 cents a share. Analysts’ average estimates expect earnings of 4 cents a share. The company expects comparable store sales to increase in the mid-single digit range.

The company currently intends to open nearly 44 new stores in fiscal year 2011, including its first store in Canada.

“Our first quarter results represent a good start to fiscal 2011, although only a small percentage of our full-year earnings,” said Rick Brooks, ceo.“This gives us added confidence as we increase our store base in the U.S.and now Canada.”

New York & Co narrows Q1 Loss to $3.6 Million

New York–New York & Company Inc. narrowed its first quarter loss through a combination of higher same-store sales and tight control of markdowns, inventory and expenses.

The company reported Thursday a loss of $3.7 million, or 6 cents per share, compared with a loss of $4.9 million, or 8 cents per share, a year ago. Adjusting for a tax change, the company said its loss would have been 4 cents per share.

Total sales increased to $239.4 million from $237 million a year earlier. Same store sales rose 2.5%

Analysts’ average estimate expected loss of 8 cents per share on revenue of $236.6 million and a same-store sales gain of 2.3%.

The women’s fashion and accessories chain, which has 545 stores, forecast its second quarter same store sales to be flat.

“While we continue to view 2011 as a transition year, we are encouraged by our customers’ positive response to our spring fashion which drove improved levels of regular price selling,” said Gregory Scott, ceo.“Changes to our product flow and promotional calendar allowed us to optimize our sales productivity.”

New York & Co. expects to close eight stores and remodel six others during the current quarter.