In an unusually quiet announcement, The St. Joe Co. said in a Securities and Exchange Commission filing Thursday that Park Brady has been appointed chief executive officer.
It was unusual because companies usually issue a splashy press release when announcing a CEO.
St. Joe, which moved its headquarters from Jacksonville to WaterSound in the Florida Panhandle last year, had been searching for a chief executive since former CEO Britt Greene resigned as part of a management shakeup in February.
Brady, former CEO of vacation rental company ResortQuest, joined St. Joe as chief operating officer in March and had been performing the functions of CEO since June.
The management shakeup came after fund manager Bruce Berkowitz, who controls 29 percent of St. Joe’s stock, threatened a proxy fight and gained control of the board of directors.
Berkowitz said at the time he was unhappy with the pace of development at the real estate company. St. Joe’s development activity has just about stopped with the collapse of the real estate market over the past few years.
Berkowitz still likes the company’s long-term prospects. St. Joe announced in SEC filings last month that it reached an agreement with Berkowitz’s company, Fairholme Funds Inc., that will allow it to acquire up to 50 percent of St. Joe’s stock.
St. Joe owns about 574,000 acres of land, mainly in the Panhandle, which is why it moved its headquarters there after almost 75 years in Jacksonville.
Its only remaining operation in the Jacksonville area is the 4,170-acre RiverTown residential development in northwestern St. Johns County.
Stovall leaves Stein Mart in better shape
While St. Joe has a new CEO, Stein Mart Inc. is searching for a new one.
David Stovall unexpectedly retired last month after a tenure that, despite a dip in earnings this year, would have to be labeled a success.
Stovall took over as CEO in December 2008 as the Jacksonville-based fashion retailer was completing its second straight year with a net loss.
Sales continued to drop over the next two years but Stein Mart was able to turn a profit. The company had diluted earnings per share of 54 cents in fiscal 2009 and then doubled that to $1.08 last year.
Stovall wouldn’t take full credit for the turnaround but cost-cutting measures and better inventory control on his watch made the company profitable despite a continued weak economy that depressed sales.
Shareholders were rewarded for that performance. The stock had actually dipped below $1 in December 2008 but as profits improved, it rocketed up above $10 by July 2009 and stayed relatively close to that level for the next two years.
After suspending dividends for two years, Stein Mart declared a special 50-cent-per-share dividend last December
But Stein Mart’s stock began dropping in August after a disappointing second-quarter earnings report. Adjusted earnings fell from 7 cents a share in the second quarter of 2010 to 3 cents this year, and concerns about the economy made investors nervous about future results.
Avondale Partners analyst Mark Montagna said he anticipates lower spending by Stein Mart customers.
“The average age of its customer is 54 years old, has household income 40 percent to 60 percent above the national average, and is saving for retirement,” Montagna said in a research note.
“We believe the volatility in the stock market, the market declines, and worry over retirement savings will cause this customer to pull back more than younger customers with less market exposure and a longer time-line to retirement,” he said.
Stovall’s retirement also unnerved investors. Following the mid-September announcement, Stein Mart’s stock slipped to a 52-week low of $5.65 in early October.
The company has not said why Stovall, who was listed at 64 years old in Stein Mart’s last proxy statement, left the company. Chairman Jay Stein has taken over as interim CEO while the company looks for a permanent replacement.
Stein Mart isn’t giving out any information on the CEO search. The new chief executive will have a difficult act to follow because in spite of the recent pullback, Stovall left Stein Mart in a good position. Earnings are lower than last year, but the company is making money, which was not the case before Stovall came on board.
Body Central called a ‘buy’
The weekend marked the one-year anniversary of the initial public offering of the other fashion retailer headquartered in Jacksonville, Body Central Corp., and its results over the past year provide an interesting contrast to Stein Mart.
While Stein Mart sales continue to fall, Body Central has produced sharp gains.
Unlike Stein Mart, Body Central aims its stores at a younger demographic, women from their late teens into their 20s. Analysts say those shoppers don’t have the same concerns about retirement savings and are continuing to spend on the latest fashions.
In the first eight months of this fiscal year, Stein Mart’s total sales fell by 1.7 percent to $746.5 million and comparable store sales fell 0.8 percent.
Comparable store sales, which measure sales at stores that have been open for at least 12 months, are a key indicator of a retailer’s performance.
Meanwhile, total sales at Body Central stores jumped by 29.6 percent in the first six months of the year to $127.9 million and comparable store sales rose 15.4 percent.
Body Central only reports sales on a quarterly basis, unlike other retailers that provide monthly data, so it hasn’t reported data yet for the summer months.
Body Central went public at $13 a share in October 2010 and the stock traded as high as $26.98 in April. It has stayed near $20 recently.
Analysts remain high on Body Central, with all six following the company rating it as a “buy,” according to Thomson Financial.
With the fate of the Stein Mart shopper a little less certain, only one analyst rates it as a “buy” while the other three following the company rating it as a “hold.”
CSX takes lead to report earnings
Earnings season starts this week for Jacksonville’s public companies, with CSX Corp. the first to report third-quarter results late on Tuesday after the stock market closes.
Besides regularly being the first local company to report earnings every quarter, CSX is generally one of the first nationally.
That makes CSX a bellwether for the rest of the market, not only because its results come early but also because CSX is a good indicator of the overall economy.
Its fortunes rest on the amount of freight shipped on its railroad, so increases or decreases in volume can tell us how the overall U.S. economy is doing.
CSX’s stock fell to a 52-week low of $17.69 in September on concerns about the economy that affected all transportation stocks, but it has rebounded back into the $20s in the past two weeks. It had traded as high as $27.06 in July.
According to Thomson, the average analyst forecast calls for CSX to report earnings of 44 cents a share in the third quarter, which would be up from 36 cents in the second quarter of 2010 but lower than the 46 cents a share earned in the second quarter this year.
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