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In the course of this presentation and in response to
your questions, statements may be made as to certain
matters that constitute forward-looking information thatis subject to certain risk and uncertainties. Additional
information concerning those factors that could cause
actual results to differ from those in the forward-looking statements can be found in the company’s annual report on Form 10-K for the year ended January 31,
2015 and most recent quarterly report on Form 10-Q.
2
Forward-Looking Statement
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• Sales growth opportunities will increase bottom line
− Proven initiatives are driving organic growth
Enhanced brand penetration
Credit card program
Ecommerce
− Accelerated store unit expansion
− Well positioned to capitalize on market trends Off-mall
Off-price
Mature customer is a growing
demographic
Stores located where growth will be the
strongest
• Low market valuation and 4% dividend
3
Key Messages
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COMPANY OVERVIEW
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• National retailer of fashionapparel for women and men,
home, accessories and shoes
• Positioned between off-priceand department/ specialty
stores
• 278 stores in 30 states, plussteinmart.com
• Loyal, mature customer withhousehold income of nearly$100,000
5
Stein Mart Facts
National Store Footprint
70% of chain in SE and TX
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• Focus on designer and national brands
(65% of mix) at a great value
− Prices up to 60% off for brand-name
and specialty merchandise
− Assortment continually enhanced and
penetrated for new and hot brands
• Sourcing focused on trends and pricing,complemented by opportunistic buying
− 1,200 vendors
− 165 associates in buying organization
• Private label and exclusive
merchandise are only 10% of mix
• Shoe department supplied by DSW
7
Our Merchandise and Buying
Sales by category
%
11%
'
1%
1%
*
%
%
*Shoe department is leased.
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!Adrienne Vittadini Eileen Tracy Kasper Riedel
Alberto Makali Etienne Aigner Kenneth Cole Robert Graham
Anne Klein Evan Picone Kut from the Cloth Robert Talbott
Ashworth Fairway & Greene Laundry by Shelli Segal Romeo & Juliet
August Silk Free People Lenox (Linens) Seven 7 Jeans
Avanti Towels Godiva London Fog Sonny LeighBCBG MAXAZRIA Greg Norman Golf Lucky Brand Spanx
Betsy Johnson Hartmarx Luigi Bormioli Steve Madden
Big Buddha Hazel Maggie London Super Dry
Bobby Jones Hickey Freeman Margaritaville Sweet Shop
Buffalo Jeans HOBO Max Studio T Tahari
Bulova Watches Hollander Metrocane Tahari
Callaway Hudson Michael Kors TalliaCalvin Klein HUE Muse Ted Baker
Carlos Santana Igloo Nautica The Sak
Coach Ike Behar Nicole Thomas Dean
Columbia Issac Mizrahi Nike Tommy Bahama
Core Bamboo Ivanka Trump Nine West Tommy Hilfiger
Daniel Rainn Izod Not Your Daughters Jeans Vaklco
Democracy “J” by Jones Original Penguin Vera Bradley
Dooney and Bourke Jack Nicklaus OXO Vince Camuto
DVF Jessica Howard Polo Vineyard Vines
Eagle Jessica Simpson Quicksilver Wacoal
Echo Jhane Barnes Ralph Lauren (Intimates) WRK
ECI Joan Vass Raymond Waites (Linens) XMI
Eileen West (Bath) Joseph A. Report Collection Yankee Candles
8
Exceptional Designer & National Brands
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• Off-mall in better regional, community
and neighborhood shopping centers
• Optimal co-tenants are higher-end
grocers, other apparel retailers, better
restaurants
• New stores average 32,000 gross and
28,000 selling sq ft
• Regional broker network helps identifylocations
New stores approved by senior
executives
Note: All stores are leased
9
Our Stores
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2005 Avg. store sales peak at $6.1M
2006-2007 Changed merch. strategy
• Became more moderate
• Lost 6% of sales
2008-2009 The Recession
• Additional 15% decline in sales
2009 Returned to profitability
• Closed underperforming stores
• Reduced annual expenses by over$30 million to match lower sales
10
Recent History
2010-2011 New merchandising team
• Increased brand penetration from33% to 65% of mix
• Reinvented Home area
• Improved margins through highermarkup and AUR
Sept. 2011 Jay Stein returns as CEO
• Reduced regular priced couponsand changed marketing from priceto product-driven
2012 Sales trends turned positive
2012 Launched private label card
2013 Ecommerce launch
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FINANCIAL HIGHLIGHTS
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• Returned to positive
comps in December
• Warm weather
challenged cold-weather
items, particularly in the
East and Southeast
• New stores added 3.1%
to total sales
• Ecommerce added 0.7%
to comp sales
12
Holiday Sales*
2015 Total Comp
December 4.7% 1.8%Nov ember -1.2% -4.8%
Nov/Dec 2.3% -0.8%
Sales % Change
*Holiday is November/December 9-week period ended January 2, 2016.
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*EBITDA in these calculations has been adjusted to exclude the following special items:• 2010 - $8.5M gift card cumulative breakage gain.• 2012 to 2014 - adjusted for the items detailed in the non-GAAP reconciliation table included in our 3/12/15 earnings release.
*Excludes 53rd week in fiscal 2012.
6.6%
5.4%
1.5%
3.3%
4.4%5.4%
4.3% 5.1%
6.5% 6.6%
.0%
.0%
0.0%
.0%
.0%
.0%
.0%
0 0 0 0 0 10* 11 1* 1* 1*
EBITDA Percentage of Sales*
$6,123 $6,079
$5,737
$5,113
$4,845 $4,813 $4,796$4,949
$5,085 $5,217
$4,000
$4,500
$5,000
$5,500
$6,000
$6,500
05 06 07 08 09 10 11 12* 13 14
Average Sales Per Store
Increasing EBITDA and Average Store Sales
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• Strong cash flow from operations
• $5 per share recapitalization dividend (Feb. 2015)
$170 of $226 million funded with debt
Balance sheet more efficient
Increases return on equity
• $275 million credit facility (Feb. 2015)
Debt will be $150M to $200M in 2015
Unused availability of $75M to $140M
• Continuing $0.30 annual dividend
• Enterprise Value - $482M (at 12/31/15)
14
Financial Position and Valuation
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2013 2014 2015 Est.
Maintenance capital expenditures:
Existing stores $10,800 $13,000 $13,200
Information systems
Other
17,700
500
15,700
800
13,600
2,200
Total maintenance capital expenditures 29,000 29,500 29,000
New and relocated stores (1) 7,300 10,700 17,800
Tenant improvement allowances (2) -3,100 -4,300 -10,500
New store net expenditures 4,200 6,400 7,300
Net total capital expenditures $33,200 $35,900 $36,300
Capital Expenditures, Net of TIA*
*TIA – Tenant improvement allowances(1) Year 2015 includes expenditures for stores opening in Spring 2016.(2) Includes TIA received or to be received for current year expenditures.
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Growth Investments – Capital Spending
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GROWTH INITIATIVES
- Organic- New Stores
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Annual Comparable Store Sales:
Historical Comparable Store Sales
Recession
Quarterly Comps Since 2012
* 2, 2016.
0.%
1.%
.0%
10.%
.%
1.% 1.1%
.%.%
.%
1.%
1.0%
10.0%
.0%
.0%
.0%
.0%
0.0%
.0%
.0%
00 00 00 00 00 010 011 01 01 01 01*
0.%
1.%
.1%
.0%
1.%
.%
.%
.1%.%
1.%
.1%
.%
.%
.0%
.%
0.%
4.0%
2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
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• Private label card (launched in
2012)
• Co-branded MasterCard (2006)
• Cardholders spend 35% more
than before having card
• Penetration has grown
substantially since PLCC launch
• Cards issued by Synchrony
Financial, which bears credit risk
18
Credit Card Program - Increasing Penetration
Credit Card Penetration (% of Sales)
PLCC launched June 2012.
.1%
.0%
.%
11.%
1.%
0.0%
.0%
.0%
.0%
.0%
10.0%
1.0%
1.0%
1.0%
011 01 01 01
01*
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• Significant selection (~80%) of stores’
merchandise, plus unique items
• Marketing tool reaches customers
and drives in-store sales
• Increases customer’s spend with
multi-channel approach
• 1.6 percent of sales YTD-2015
1 percent of sales in fiscal 2014
• Outsourced technology and
fulfillment
19
E-commerce
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Focus on Store Growth
00 00 00 00 010 011 01 01 01 0101
*
262 268 280 276 267 264 262 263 264 270 278
12 14 6 2 2 3 6 4 9 10 12*
(6) (2) (10) (11) (5) (5) (5) (3) (3) (2) (2)
0 0
0 0 1 0 5 4 4 4 7 1 1
* 12, 2016.
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Stores opened by state2014: CA-3 FL-2 DC-1 NM-1 NV-1 VA-1
2015: CA-3 FL-2 AZ-1 GA-1 MI-1 NY-1 VA-12016: States not announced. 25% in newer markets.
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21
Store Unit Expansion - 3 to 4% Annual
100 to 125 Large Under-Penetrated Market Opportunities
2016 store opening markets:Large under-penetrated 3
Smaller & existing 9Total 12
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22
New Store Economics
STORE SIZE Average 32,000 gross square feet (28,000 selling)
NEW STORE INVESTMENT Leaseholds(1) $500,000Fixtures and equipment 500,000
Inventory, net of accounts payable 400,000
Pre-opening expenses (2) 100,000
Total initial investment(3) $1,500,000
UNIT ECONOMICS(4) Sales $5,250,000+
Min. planned contribution % of sales 8%
Payback period 3 years
(1) Net of Landlord Allowance
(2) Excludes rent during pre-opening period which can range to $200,000
(3) Varies depending on whether site is new construction or existing remodel
(4) Year 3
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POSITIONINGADVANTAGES
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Strong Customer and Geographic Focus
SMRT age from credit cardholder & Preferred Customer data.SDSR = Specialty and Department Store Retailers.
* Population change data by 2025 from U.S. Census Bureau.
Desirable Customer• Higher income than Specialty &
Department Store Retailers (SDSR)SMRT $95,000SDSR $79,000Avg U.S. $54,000
• Older and proportionatelyunderserved
Growing Customer Demographic• U.S. median age is trending older • 65+ group projected to increase 38%
by 2025
Strength in Growth States• States with highest growth of females
65+ coincide with our top existing &target markets
States w/greatest 65+ growth
#
% .
*
44 43%
44 51%
26 38%. 20 36%
15 37%
14 39%
11 62%
1
1% 1%
%
%
%
%
%%
65
5064
3549
35
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• 300 store chain by 2017
4 to 5% annual unit growth
• 25% credit card penetration by 2020
• Ecommerce - profitable & sizeable
Operations will be in house
Ability to pick up in certain stores
• Significant pay-down of debt
• Supply Chain secondary-distribution ability
Improve inventory turn and increase sales
25
The Next 5 Years
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KEY MESSAGES
26
Summary – An Investment Opportunity
• Sales growth opportunities will drive bottom line
− Proven initiatives are driving organic growth
Enhanced brand penetration
Credit card program
Ecommerce
− Accelerated store unit expansion
− Well positioned to capitalize on market trends
Off-mall
Off-price
Mature customer is a growing
demographic
Stores located where growth will be the
strongest
• Low market valuation and 4% dividend
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Linda Tasseff, Director of Investor RelationsOffice: 904-858-2639
Cell: 904-910-1867E-mail: [email protected]
Greg Kleffner, EVP, Chief Financial Officer Office: 904-346-1500E-mail: [email protected]
Contact Information
27
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