After reporting improving sales trends in the second and third quarters, Jacksonville-based fashion retailer Stein Mart Inc. had a disappointing holiday season.
The company said comparable-store sales dropped 3.3 percent in the November-December period.
Comparable-store sales are sales at stores open for more than one year and are considered a key indicator of a retailer’s performance.
Stein Mart doesn’t normally announce sales results until the end of the quarter, but its late Friday report preceded a presentation Monday to the ICR Conference in Orlando, a major annual investor event.
“Clearly our sales were disappointing,” CEO Hunt Hawkins said at the conference, which was broadcast over the internet.
Stein Mart President MaryAnne Morin said the disappointment resulted from “a perfect storm of events” in the fourth quarter.
One problem was Stein Mart’s ongoing strategy to rely less on promotions and more on everyday low pricing to attract shoppers.
“Whereas that strategy worked for us throughout the rest of the year, it didn’t work quite as well in Q4,” Morin said.
She also said Stein Mart spent less on marketing in the holiday season than it did in the past.
“It was planned, we’ve all signed up for it, but it turned out that the way we spent the money wasn’t as efficient as we originally planned,” she said.
One mistake was spending all of its television ad money on national cable shows as opposed to also advertising on local channels, Morin said.
“We’ll take all these learnings as we move into 2019,” she said.
Morin said Stein Mart will be using more technology and marketing data to find what customers want.
Another initiative this year will be a “Stein Mart SMart Rewards” Program, which will combine its credit card and preferred customer programs. The rewards program will launch in the fall, Morin said.
Morin joined Stein Mart in February 2017, a month after Hawkins was named permanent CEO.
“Our leadership team has been in place for just under two years and we have accomplished a lot during this time frame, moving with strategic urgency,” Hawkins said. “But we recognize we have a lot more to do.”
Hawkins remains optimistic about Stein Mart’s direction and in Friday’s news release announcing the holiday sales drop, he said fiscal 2018 operating results will still be “significantly better” than 2017.
At Monday’s conference, Hawkins said the management team has “touched every aspect of our business” to improve operations over the last two years, and some moves are already successful.
“Others are still being finetuned and we are still learning from that,” he said.
Stein Mart’s presentation Monday came about an hour after Shoe Carnival Inc. projected continued sales and earnings growth at the conference.
The footwear chain controlled by former Jacksonville Jaguars owner Wayne Weaver expects to report comparable-store sales rising 4 percent in the fiscal year ending Feb. 2 with earnings of $2.41 to $2.43 a share, up from $1.15 in fiscal 2017.
“Our solid finish to the fiscal year has been driven by broad-based sales increases, with particular strength in our boot, casual and athletic categories,” CEO Cliff Sifford said in a news release.
Shoe Carnival projected fiscal 2019 earnings of $2.60 to $2.70 a share, with comparable-store sales rising by a low single-digit percentage.
Weaver is chairman of Shoe Carnival and his family is the company’s largest shareholder, controlling about 31 percent of the stock.
Jacksonville-based CSX Corp. on Wednesday reported fourth-quarter earnings of $1.01 a share, up from adjusted earnings of 64 cents last year.
The company’s operating ratio (expenses divided by revenue) was 60.3 percent, down from an adjusted ratio of 65.1 percent the previous year. The improvement in operating ratio has been a key part of management’s strategy to improve CSX’s financial performance.
Revenue rose 10 percent to $3.14 billion, helped by increases in fuel recovery payments and “broad-based” freight volume growth, the railroad company said.
The earnings, released after the market closed, were in line with analysts’ forecasts which ranged from 90 cents to $1.07 a share, according to Yahoo Finance.
Seenu Kasturi, who was already serving as chairman and president of ARC Group Inc., was appointed CEO of the Jacksonville-based restaurant company last week.
Kasturi is also the largest shareholder of the company, which operates the Dick’s Wings & Grill chain and is expanding with acquisitions of other restaurant concepts. He controls about 21 percent of ARC Group’s stock, according to Securities and Exchange Commission filings.
Former CEO Richard Akam will stay with the company as chief operating officer and secretary. Kasturi will continue to serve as chairman and chief financial officer, in addition to his role as CEO.
Dick’s Wings has 23 restaurants and ARC Group has recently grown by acquiring a chain called Fat Patty’s. It also has a pending agreement to buy the Tilted Kilt chain.
The company said Kasturi is focusing on more acquisitions.
“ARC Group is in a period of unprecedented growth, both organic and through acquisitions. In this new capacity as CEO, I look forward to accelerating our growth strategy through carefully selected and strategic acquisitions, where we can acquire undervalued assets at attractive multiples and benefit from the tremendous operating synergies,” Kasturi said in a news release.
ARC Group expects to have annual revenue of more than $25 million when it completes the Tilted Kilt deal.
A private equity firm is acquiring a majority interest in Marco Ophthalmic Inc., a Jacksonville-based supplier of diagnostic ophthalmic equipment.
Stamford, Connecticut-based Atlantic Street Capital said Friday it plans to merge Marco with another eye care equipment company it owns, Lombart Instrument, into a new company called Advancing Eyecare Holdings.
CEO David Marco will become co-chairman of Advancing Eyecare and continue as a “meaningful investor” in the company, Atlantic Street said.
Terms of the deal were not announced.
In a news release, David Marco said the deal “allows for expanded service capability for Marco and greater technology offerings for Lombart. The combined entity enhances and accelerates our unique abilities to modernize and maximize efficiencies of the eye care platforms.”
The deal is expected to be completed during the first quarter.
Marco was founded in Jacksonville in 1967. A spokesman for Atlantic Street did not have data available on employees or revenue for Marco.
Norfolk, Virginia-based Lombart, which distributes ophthalmic instruments to ophthalmologists and optometrists, was acquired by Atlantic Street in 2016.
Final bids to buy Cox Enterprises Inc.’s group of 14 television stations, including two in Jacksonville, will be in by Jan. 30, according to a report last week by CNBC.
Possible bidders include Tegna Inc., which already owns two Jacksonville stations, the report said. Tegna would have to divest some of the stations if it does have the winning bid for the Cox group.
Atlanta-based Cox owns Jacksonville Fox affiliate WFOX TV-30 and operates CBS affiliate WJAX TV-47 under a shared services agreement. WJAX is owned separately by a former Cox executive.
The company announced in July it was “exploring strategic options” for its group of stations, saying they could be more successful financially if grouped with a larger operator of stations.
Tegna owns 49 stations in 41 markets, including Jacksonville NBC affiliate WTLV TV-12 and ABC affiliate WJXX TV-25.
The other bidders for the Cox stations are Hearst, which owns 32 stations, and EW Scripps Co., which owns 51, CNBC said, citing unidentified sources. It said bids for the entire group could be between $2 billion and $3 billion.
Drone Aviation Holding Corp. said last week it was “selected by a prime contractor under an initial $3.8 million award,” without announcing further details.
Jacksonville-based Drone Aviation, which produces lighter-than-air aerostats and electric-powered drones, reported revenue of about $1 million in the first nine months of 2018.