Stein Mart (SMRT), an operator of an apparel retailer, has reported a 49.12 percent plunge in profit for the quarter ended Aug. 2, 2014, due to increase in costs and operating expenses.

The company earned $1.74 million or $0.04 a share in the second-quarter compared with $3.41 million or $0.08 a share a year ago. Adjusted earnings per share came in at $0.06, when analysts expected $0.09.

Revenue during the second-quarter went up marginally 2.47 percent to $298.16 million from $290.97 million in the last year period.

Gross margin expanded by 65 basis points over the last year period to 28.25 percent. Total expenses as a percentage of revenues increased to 99.06 percent from 97.99 percent in the same period last year.That has resulted in contraction of 107 basis points in operating margins to 0.94 percent.

The company posted operating income of $2.79 million, compared with operating $5.84 million in the previous year period.

"Despite a challenging first half of the year with weather impacting sales, we have a number of important initiatives in place" said Jay Stein, CEO. "Key among these is our growth focus, as we open more new and relocated stores this fall and continue to build our ecommerce business. These and our other strategies play a very important role in our long-term business development."

Cash Flow

Stein Mart has generated cash of $15.72 million from operating activities during the first half, up 474.04 percent or $12.98 million when compared with the last year period. The company has generated 2.51 cents of operating cash flow in every sales dollar for the first half, up from 0.45 cents in the same period last year.

The company has spent $22.29 million cash to meet investing activities during the first half, as against cash outgo of $18.99 million in the last year period. It has made net capital expenditure of $22.29 million during the first half, which was higher by 17.38 percent or $3.30 million, from a year ago.

The company has spent $7.19 million cash to meet financing activities during the first half, as against cash outgo of $2.84 million in the last year period. It has spent net of $2.39 million on repurchase of common stocks.

The company's cash dividend payment increased 152.21 percent or $3.37 million to $5.58 million. Dividend payment accounted for 35.51 percent of operating cash flow for the first half, compared with 80.83 percent in the same period previous year.

As on Aug. 02, 2014, the company's cash balance stood at $53.10 million, up 10.28 percent or $4.95 million from Aug. 03, 2013.

Working Capital

Stein Mart has witnessed an increase in the working capital over the last one year. The company's working capital stood at $168.03 million as at Aug. 02, 2014, up $19.33 million or 13 percent from $148.70 million on Aug. 03, 2013. It registered an increase in current ratio to 1.94 as at Aug. 02, 2014 from 1.87 on Aug. 03, 2013.

Shares of the company close at $12.88 on Thursday.