Stein Mart (Nasdaq: SMRT) warned us in May that its second-quarter results would be disappointing. A quick look at the numbers shows it certainly followed through. And, to ensure the Street understood just how tough times are for the company, it proceeded to announce that it expects to lose money in the third quarter.
Because it lowered expectations for the second quarter so far in advance, Stein Mart technically met expectations. That's cold comfort to investors, though. The company earned $2.2 million, or $0.05 per share, in the quarter, a more than 73% drop from last year's numbers. Total sales fell 1.7% to $330.7 million, while same-store sales slipped 1.2%.
There's no question that these are tumultuous times for retailers, with concerns prevalent in several segments of the economy. Some retailers are better positioned than others to withstand the setbacks that follow economic uncertainty. Among the discount retailers, Ross Stores (Nasdaq: ROST) recently lowered its full-year guidance, while TJX (NYSE: TJX) maximized its projections.
And then there's Stein Mart. Though it didn't provide annual guidance, the retailer did say that it expects to lose between $0.03 and $0.06 per share in the third quarter, on a 2% to 4% decrease in comps. Analysts had Stein Mart penciled in for a gain of $0.04 per share just a few days ago. Better flip those pencils around and use that eraser.
The company is at least trying to return value to shareholders, purchasing 1 million shares of stock in the second quarter. Unfortunately, with the stock price falling so quickly, that money could have been put to better use elsewhere.
Given that far Stein Mart's stock price has fallen nearly 50% from its annual high, some Fools might wonder whether it's now a bargain. It may look that way, but this company's performance has me too concerned to even try to dive into the numbers. With management's pessimistic outlook, it looks like there are more bad news reports to come. I think this one could remain sunk for quite some time.
For more on the discount retailers, check out:
Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article. The Fool's disclosure policy keeps its receipts.
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