- Nasdaq has put Stein Mart on notice that the retailer doesn't currently meet its requirements for trading on the stock exchange, Stein Mart said in a securities filing on Monday.
- The discount department store's stock sold for under $1 for more than 30 days, prompting the notice from Nasdaq. The company has until Jan. 6 of next year to regain compliance, which would require its stock to close at a price of more than $1 for 10 consecutive days.
- Stein Mart said it plans to monitor its stock price actively and take action to remain compliant with Nasdaq's rules.
Stein Mart risks getting booted to a penny stock exchange, and it's not alone in the retail world. Pier 1 and Francesca's recently executed reverse stock splits to boost their share prices in efforts to keep trading on a major stock exchange.
All three of those retailers are trying to stabilize their finances, with income constrained (if not negative) and sales bases shrinking. All three face a high risk of going bankrupt according to data from CreditRiskMonitor.
In the first quarter, Stein Mart posted a positive profit, but it was down 45% from the year before as sales fell 3.8% and comps were down 1.7%. Its top-line sales have fallen for the past two fiscal years, and comps have been negative for the past three years.
Stein Mart CEO Hunt Hawkins blamed the retailer's Q1 drop in comp sales on a late start to spring in the southern and western U.S. and said in a statement that his team expected comp trends to improve later this year with initiatives slated to roll out this fall.
Among its efforts to improve sales, Stein Mart said in May it would install self-service Amazon Hub Lockers in nearly 200 of its 283 stores. Stein Mart said it hoped the lockers would drive traffic to stores.
The retailer has also tapped Oracle for cloud services to boost its omnichannel capabilities. With the partnership, Stein Mart expects to consolidate its planning and forecasting for its stores, e-commerce site and warehouses into a single solution that will also give it tools to manage its assortment.