Someone told a joke, and everybody laughed but me. That's the way I feel comparing the 9.4% rise in fashion and home decor retailer Stein Mart's (NASDAQ:SMRT) stock with the press release I just finished.

I'm guessing Dr. Feelgood passed out his candy after learning that Stein Mart surpassed earnings expectations for the quarter and expects them to grow about 24% next quarter. The market looks forward, not backward, right? That's got to be it, because the release was pretty negative.

Slow sales jumped out at me like a ghost in an M. Night Shyamalan movie. Take away the extra week and they only grew 3.3%, with a 0.9% increase in same-store sales. Apparently I am not the only one who noticed, as I read this from CEO Michael Fisher a few paragraphs later: "We were disappointed in our inability to grow sales and profitability to our projections in 2006."

Give the man credit for his candor.

The problem, as the release correctly and poignantly disclosed, is that low sales screws up margins. The gross margin held firm, but the operating margin declined, because SG&A expenses rose faster than sales. Operating leverage works both ways.

Although I like Stein Mart and have shopped there many times, I'm not sure what it is at its core. It's kind of like TJX (NYSE:TJX) with higher prices mixed with some Pier 1 (NYSE:PIR) and Kirkland's (NASDAQ:KIRK) and an outsourced shoe department run by DSW (NYSE:DSW). In some respects, it's like plaid pants paired with a floral shirt. It's unique, but it's not an identity.

That's why I liked reading that the company will be focusing more effort on a "new branding message." A new branding message? That implies there was an old branding message. All I can say is: Good luck to the ad agency, and I can't wait to hear the message it crafts.

Like I said, I couldn't match the message with the response, the financial performance with the rise in the stock price. But it wasn't the first time that's happened, and I know it won't be the last. Perhaps the market knows something I don't, and that's what made the joke funny. At least I'll have time to learn more before next quarter's earnings release.

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Retail editor David Meier loves a good joke. In fact, he thought this one was pretty funny. He does not own shares in any of the companies mentioned. He is ranked No. 680 out of 24,799 investors in The Motley Fool's CAPS rating service. You can view his TMF profile here. The Fool's disclosure policy is no laughing matter.