Jacksonville, Fla. -- Stein Mart Inc. announced Friday that it will restate its financial statements for fiscal years 2009, 2010 and 2011, its quarterly data for the first quarter of 2012 and for all quarters in 2010 and 2011, as well as its selected financial data for the relevant periods due to merchandising accounting errors.
The accounting mistakes came about because it accounted for some markdowns as temporary discounts rather than permanent ones, affecting how it valued its unsold clothing, the Associated Press said. As a result, inventories were overstated by about $3 million through July 28, while the costs of sold merchandise were understated by the same amount.
In addition, Stein Mart is reviewing how it accounts for store improvement costs that are reimbursed by its landlords, because it now believes that changes to stores did not increase the value of its landlords' properties. It had previously believed the opposite, the Associated Press reported.
It said that its accounting methods had understated write-downs the company took on the value of its stores by about $11 million from 2006 to 2009, and overstated rent expense by about $6 million.