Stein Mart (SMRTQ) 8-K Stein Mart, Inc. Reports 4Q & FY’06 Financial Results

Exhibit 99.1

1200 RIVERPLACE BOULEVARD • JACKSONVILLE, FL 32207-1809 • (904) 346-1500

March 21, 2007	For more information:
	Susan Datz Edelman
FOR IMMEDIATE RELEASE	Director, Stockholder Relations
	(904) 346-1506
	sedelman@steinmart.com

STEIN MART, INC. REPORTS 4Q & FY’06 FINANCIAL RESULTS

JACKSONVILLE, FL – Stein Mart, Inc. (Nasdaq: SMRT) today announced financial results for its fourth quarter and fiscal year ended February 3, 2007. The Company’s fiscal 2006 was a 53-week year, with an extra week at the end of January; the Company’s fiscal 2005 was a 52-week year ended January 28, 2006.

Fourth quarter results

For the 14-week fourth quarter of 2006, the Company earned $21.0 million or $0.48 per diluted share as compared to net income of $21.1 million or $0.48 per diluted share in 2005. As previously reported, for the 14 weeks ended February 3, 2007, sales increased 7.9 percent to $461.0 million from $427.4 million for the 13 weeks ended January 28, 2006. The extra week in the fourth quarter of 2006 added $19.7 million in sales and increased earnings per share approximately $0.04. Comparable store sales for the 13 weeks ended January 27, 2007 increased 0.9 percent from the 13 weeks ended January 28, 2006.

Gross profit increased to $135.5 million or 29.4 percent of net sales from $125.2 million or 29.3 percent of net sales. The gross profit rate increased slightly due to improved markup, somewhat offset by increased markdowns and equity-based buying costs. Gross profit for this year’s fourth quarter was favorably impacted by $2.1 million pre-tax from better-than-expected shrinkage results and a favorable rent adjustment of $1.5 million. Last year’s fourth quarter gross profit was favorably impacted by $3.4 million pre-tax from better-than-expected shrinkage results and $1.9 million insurance recovery for hurricane losses.

Selling, general and administrative (SG&A) expenses were $108.7 million or 23.6 percent of net sales as compared to $97.6 million or 22.8 percent of net sales during the prior year’s fourth quarter. The SG&A rate was higher due to a lack of leverage on relatively flat sales, and reflected increases in payroll, depreciation, advertising, insurance expenses, and equity-based compensation.Store closing and asset impairment charges of $1.3 million and $1.8 million were recorded in the fourth quarter of 2006 and 2005, respectively.

Fiscal year results

For the 53-week fiscal year 2006, the Company earned $37.1 million or $0.85 per diluted share, as compared to net income of $50.9 million or $1.15 per diluted share in 2005. As previously reported, for the 53 weeks ended February 3, 2007, net sales totaled $1.50 billion, a 1.3 percent increase from the $1.49 billion in net sales for the 52 weeks ended January 28, 2006. As noted above, the extra week added $19.7 million in sales and increased earnings per share approximately $0.04. Comparable store sales for the 52 weeks ended January 27, 2007 declined 1.2 percent from the 52 weeks ended January 28, 2006.

Gross profit was $416.3 million or 27.7 percent of net sales compared to $416.2 million or 28.1 percent of net sales. The gross profit rate declined due to increases in markdowns, occupancy and equity-based buying costs, somewhat offset by improved markup.

Selling, general and administrative (SG&A) expenses were $376.6 million or 25.1 percent of net sales as compared to $353.1 million or 23.8 percent of net sales during the prior year. The SG&A rate was higher due to a lack of leverage on relatively flat sales, and reflected increases in payroll, depreciation, advertising, insurance expenses and equity-based compensation. Store closing and asset impairment charges of $2.4 million and $3.4 million were recorded in 2006 and 2005, respectively.

Other income increased $2.7 million for the fourth quarter and for the year. This increase is from a $1.8 million settlement received from the Visa Check/MasterMoney anti-trust litigation and the revenue from our new credit card program.

“We were disappointed in our inability to grow sales and profitability to our projections in 2006,” said Michael D. Fisher, president and chief executive officer of Stein Mart, Inc. “We focused on implementing a number of initiatives designed to make our business more relevant to customers as well as more productive, but in this uncertain retail climate, our ambitious agenda proved to be more challenging than anticipated. We have made substantial progress, and our priority now is to fine-tune our initiatives, attract customers, and provide the fashion apparel and home décor they desire.”

Accomplishments:

• Installed markdown optimization software

• Eliminated children’s apparel; added space and inventory to intimate apparel and special sizes, as well as additional categories of ready-to-wear

• Added key, exclusive vendors in fashion apparel (A Line/Anne Klein, Jones & Co.) to reinforce Stein Mart’s value proposition; expanded proprietary brands (Alan Flusser Golf; Peck & Peck weekend)

• Partnered with internationally known interior designer/author Nina Campbell for exclusive home décor and linens; the agreement includes personal appearances and a magazine/ design workbook exclusively for Stein Mart customers

• Introduced new proprietary British-inspired menswear label (T Harris)

• Unified all shoe departments under DSW Shoes

• Initiated a co-brand Stein Mart Mastercard® to provide a new level of benefit to our customers, as well as more efficient and targeted communications ability

• Opened 12 new stores; they generated $28.6 million in sales in 2006. Six stores were closed, for a year-end total of 268 stores

• Spent $48.8 million to open new stores, upgrade technology and improve/remodel stores

• Completed the installation of point-of-sale (POS) processing technology to speed transactions in all stores

• Made the associated structural changes in the cash/wrap and service areas of stores receiving the new POS technology

• Upgraded paint/décor package in selected stores

• Paid a special dividend of $1.50 per share to all stockholders; maintained regular $0.25 annual dividend

Plans for 2007

The following initiatives are expected to have strategic prominence in the Company’s operations in 2007:

• Unveil a new branding message; a new advertising agency (DeVito/Verdi) has been retained to do customer research and develop creative—new ads should appear in Fall ‘07.

• Continue to integrate/refine markdown optimization software to improve gross margin

• Plan to open approximately 15-20 new stores—two in the first quarter, with the remainder opening in the third and fourth quarters. Two stores will be relocated and two locations are being considered for closure due to under-performance.

• Continue to upgrade paint/décor package in selected stores

Guidance

First quarter ‘07 expectations have been somewhat diminished by a weather-impaired February which did not support selling fresh spring product. March will be positively impacted by an earlier Easter and customer

response in the first two weeks of the month is encouraging. Management expects March comparable stores sales to increase in the mid-single-digit range and April to be flat to down slightly with less benefit from Easter, resulting in a comparable stores sales increase in the low single digit range for the first quarter of 2007. If those comparable store goals are achieved, they would produce earnings per share between $0.21 and $0.23 for the first quarter of 2007, as compared to $0.17 for the same period last year.

Conference Call with Management

Management will discuss these financial results and the outlook for first quarter 2007 in a conference call today (March 21, 2007) at 10:00 a.m. ET. The call may be heard on the investor relations portion of Stein Mart’s website athttp://ir.steinmart.com, and a recording of the call will remain on the website until the end of the month.

Management to present at Merrill Lynch Retailing Leaders Conference

Michael Fisher, president and chief executive officer, and William Moll, executive vice president and chief merchandising officer, will make a presentation at the Merrill Lynch Retailing Leaders Conference in New York City tomorrow (Thursday, March 22, 2007) at 8:45 a.m. ET. A live audio webcast of management’s presentation will be available. To access the audio webcast, log on to the investor relations portion of the Company’s website athttp://ir.steinmart.com. A replay of the presentation will be available on the website until the end of the month.

About Stein Mart

Stein Mart stores offer the fashion merchandise, service and presentation of a better department or specialty store, at prices competitive with off-price retail chains. Currently with locations from California to New York, Stein Mart’s focused assortment of merchandise features moderate to designer brand-name apparel for women, men and young children, as well as accessories, gifts, linens and shoes.

SAFE HARBOR STATEMENT>>>>>>> Except for historical information contained herein, the statements in this release may be forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company does not assume any obligation to update or revise any forward-looking statements even if experience or future changes make it clear that projected results expressed or implied will not be realized. Forward-looking statements involve known and unknown risks and uncertainties that may cause Stein Mart’s actual results in future periods to differ materially from forecasted or expected results. Those risks include, without limitation:

• the effectiveness of advertising,marketing and promotional strategies

• on-going competition from other retailers

• changing preferences in apparel

• changes in consumer spending due to current events and/or general economic conditions

• unanticipated weather conditions and unseasonable weather

• adequate sources of merchandise at acceptable prices

• availability of new store sites at acceptable lease terms

• the Company’s ability to attract and retain qualified employees to support planned growth

• ability to successfully implement strategies to exit or improve under-performing stores

• disruption of the Company’s distribution system

• acts of terrorism

and the other risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission.

SMRT-F

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Additional information about Stein Mart, Inc. can be found at www.steinmart.com

Stein Mart, Inc.

Consolidated Balance Sheets

(Unaudited)

(In thousands)

	February 3, 2007		January 28, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	17,560	$	20,200
Short-term investments		10,835		104,935
Trade and other receivables		10,164		11,121
Inventories		290,943		265,788
Prepaid expenses and other current assets		14,531		13,672
Total current assets		344,033		415,716
Property and equipment, net		113,254		87,106
Other assets		23,110		17,023
Total assets	$	480,397	$	519,845
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	83,243	$	88,408
Accrued liabilities		78,072		80,337
Income taxes payable		7,483		9,892
Total current liabilities		168,798		178,637
Other liabilities		23,427		17,469
Total liabilities		192,225		196,106
COMMITMENTS AND CONTINGENCIES
Stockholders’ equity:
Preferred stock - $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding
Common Stock - $.01 par value; 100,000,000 shares authorized; 43,736,720 and 43,516,372 shares issued and outstanding, respectively		437		435
Additional paid-in capital		21,803		21,967
Unearned compensation		—		(3,704	)
Retained earnings		265,932		305,041
Total stockholders’ equity		288,172		323,739
Total liabilities and stockholders’ equity	$	480,397	$	519,845

Stein Mart, Inc.

Consolidated Statements of Income

(Unaudited)

(In thousands except per share amounts)

	14 Weeks Ended February 3, 2007			13 Weeks Ended January 28, 2006		Year Ended February 3, 2007		Year Ended January 28, 2006
Net sales	$	460,990		$	427,359	$	1,501,296	$	1,481,615
Cost of merchandise sold		325,523			302,155		1,084,975		1,065,409
Gross profit		135,467			125,204		416,321		416,206
Selling, general and administrative expenses		108,651			97,572		376,611		353,104
Other income, net		6,843			4,171		18,214		15,477
Income from operations		33,659			31,803		57,924		78,579
Interest income (expense), net		(90	)		690		1,006		2,026
Income before income taxes		33,569			32,493		58,930		80,605
Provision for income taxes		12,501			11,438		21,754		29,721
Net income	$	21,068		$	21,055	$	37,176	$	50,884
Earnings per share – Basic	$	0.49		$	0.49	$	0.86	$	1.18
Earnings per share – Diluted	$	0.48		$	0.48	$	0.85	$	1.15
Weighted-average shares outstanding – Basic		43,147			43,374		43,196		43,283
Weighted-average shares outstanding – Diluted		43,789			44,281		43,877		44,388

Stein Mart, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Year Ended February 3, 2007			Year Ended January 28, 2006
Cash flows from operating activities:
Net income	$	37,176		$	50,884
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,992			20,223
Impairment of property and other assets		649			708
Store closing charges		1,973			2,197
Gain from insurance settlement		—			(639	)
Deferred income taxes		(4,536	)		(2,114	)
Share-based compensation		5,505			880
Tax benefit from equity issuances		794			4,617
Excess tax benefits from share-based compensation		(742	)		—
Changes in assets and liabilities:
Trade and other receivables		957			898
Inventories		(25,155	)		11,376
Prepaid expenses and other current assets		(859	)		(747	)
Other assets		(7,783	)		(3,804	)
Accounts payable		(5,165	)		(10,755	)
Accrued liabilities		(2,577	)		1,297
Income taxes payable		(2,409	)		2,544
Other liabilities		8,499			(1,202	)
Net cash provided by operating activities		30,319			76,363
Cash flows from investing activities:
Capital expenditures		(48,759	)		(34,801	)
Purchases of short-term investments		(641,005	)		(1,971,320	)
Sales of short-term investments		735,105			1,938,860
Net cash provided by (used in) investing activities		45,341			(67,261	)
Cash flows from financing activities:
Borrowings under notes payable to banks		166,021			—
Repayments of notes payable to banks		(166,021	)		—
Cash dividends paid		(76,285	)		(8,187	)
Excess tax benefits from share-based compensation		742			—
Proceeds from exercise of stock options		2,171			15,250
Proceeds from employee stock purchase plan		1,160			1,112
Repurchase of common stock		(6,088	)		(17,327	)
Net cash used in financing activities		(78,300	)		(9,152	)
Net (decrease) increase in cash and cash equivalents		(2,640	)		(50	)
Cash and cash equivalents at beginning of year		20,200			20,250
Cash and cash equivalents at end of year	$	17,560		$	20,200
Supplemental disclosures of cash flow information:
Income taxes paid	$	25,009		$	25,027
Interest paid		434			—