It’s certainly no secret that department stores are among the most troubled of all retail businesses, given their relatively large physical footprints, high operating costs, and disrupted business models courtesy of the Internet. Still, some are prospering through this difficult time by differentiating themselves. Jacksonville, Fla.-based Stein Mart, Inc. (NASDAQ:SMRT) is one of those that has found a way to make it despite strong industry headwinds. In the company’s recently released earnings, profits were up nearly 50%, which should have sent shares higher — instead they dropped. The reason was not to do with operating performance, but the announcement of an SEC investigation into the restatement of prior financial results, along with a change in auditors. Is this unfair punishment to an otherwise strong performer?
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