UNITED STATESSECURITIES
AND EXCHANGE COMMISSION  Washington, D.C. 20549

# FORM 10-Q

|[X] | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT           OF 1934
|--- | -------------------------------------------------------------------------------------------------

For the quarterly period ended July
30, 2005

OR

|[   ] | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT           OF 1934
|----- | --------------------------------------------------------------------------------------------------

For the transition period
from __________ to __________

Commission file number
0-20052

|STEIN MART, INC.                                      
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|Florida                                      | 64-0466198            
|-------------------------------------------- | ----------------------
|(State or other jurisdiction of              | (I.R.S. Employer      
|incorporation or organization)               | Identification Number)
|1200 Riverplace Blvd., Jacksonville, Florida | 32207                 
|(Address of principal executive offices)     | (Zip Code)            

Registrants
telephone number, including area code: (904) 346-1500

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.Yes [X]      No [   ]

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X]      No [   ]

At August 24, 2005, the latest
practicable date, the Registrant had issued and outstanding an aggregate of 43,823,717
shares of its common stock.

---

# STEIN MART, INC.TABLE
OF CONTENTS

|                               |                                                                                         | PAGE
|------------------------------ | --------------------------------------------------------------------------------------- | ----
|PART I - FINANCIAL INFORMATION |                                                                                        
|                               |                                                                                         |     
|Item 1.                        | Consolidated Financial Statements:                                                     
|                               | Consolidated Balance Sheets at July 30, 2005, January 29, 2005 and July 31, 2004        | 3   
|                               | Consolidated Statements of Operations for the 13 Weeks and 26 Weeks Ended July 30, 2005
|                               | and July 31, 2004                                                                       | 4   
|                               | Consolidated Statements of Cash Flows for the 26 Weeks Ended July 30, 2005             
|                               | and July 31, 2004                                                                       | 5   
|                               | Notes to Consolidated Financial Statements                                              | 6   
|Item 2.                        | Management's Discussion and Analysis of Financial Condition and Results of Operations   | 10  
|Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk                              | 14  
|Item 4.                        | Controls and Procedures                                                                 | 15  
|PART II - OTHER INFORMATION   
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                             | 15  
|Item 4.                        | Submissions of Matters to a Vote of Security Holders                                    | 16  
|Item 6.                        | Exhibits                                                                                | 16  
|SIGNATURES                     | 17                                                                                     

2

---

Stein Mart,
Inc.Consolidated Balance Sheets  (In thousands)

|                                                   | July 30,
2005 | January 29,
2005 | July 31,
2004
|-------------------------------------------------- | ------------- | ---------------- | -------------
|
|Current assets:                                    |               |                  |              
|Cash and cash equivalents                          |               |                  | $            
|Short-term investments                             |               |                  |              
|Trade and other receivables                        |               |                  |              
|Inventories                                        |               |                  |              
|Prepaid taxes                                      |               |                  |              
|Prepaid expenses and other current assets          |               |                  |              
|                                                   |               |                  |              
|Total current assets                               |               |                  |              
|Property and equipment, net                        |               |                  |              
|Other assets                                       |               |                  |              
|                                                   |               |                  |              
|Total assets                                       |               |                  | $            
|                                                   |               |                  |              
|LIABILITIES AND STOCKHOLDERS' EQUITY               |               |                 
|Current liabilities:                               |               |                 
|Accounts payable                                   |               |                  | $            
|Accrued liabilities                                |               |                  |              
|Income taxes payable                               |               |                  |              
|                                                   |               |                  |              
|Total current liabilities                          |               |                  |              
|Other liabilities                                  |               |                  |              
|                                                   |               |                  |              
|Total liabilities                                  |               |                  |              
|COMMITMENTS AND CONTINGENCIES                      |               |                 
|Stockholders' equity:                              |               |                 
|Preferred stock - $.01 par value; 1,000,000 shares |               |                 
|authorized; no shares issued or outstanding        |               |                 
|Common stock - $.01 par value; 100,000,000 shares  |               |                 
|authorized; 43,658,910, 42,880,031 and 42,386,629  |               |                 
|shares issued and outstanding, respectively        |               |                  |              
|Paid-in capital                                    |               |                  |              
|Unearned compensation                              |               |                  |              
|Retained earnings                                  |               |                  |              
|                                                   |               |                  |              
|Total stockholders' equity                         |               |                  |              
|                                                   |               |                  |              
|Total liabilities and stockholders' equity         |               |                  | $            
|                                                   |               |                  |              

The accompanying notes
are an integral part of these consolidated financial statements.

3

---

Stein Mart,
Inc.Consolidated Statements of Operations  (Unaudited)  (In thousands, except per share
amounts)

|                                                      | 13 Weeks Ended | 26 Weeks Ended
|----------------------------------------------------- | -------------- | --------------
|
|Net sales                                             |                |               
|Cost of merchandise sold                              |                |               
|                                                      |                |               
|Gross profit                                          |                |               
|Selling, general and administrative expenses          |                |               
|Other income, net                                     |                |               
|                                                      |                |               
|Income from operations                                |                |               
|Interest income                                       |                |               
|Interest expense                                      |                |               
|                                                      |                |               
|Income from continuing operations before income taxes |                |               
|Provision for income taxes                            |                |               
|                                                      |                |               
|Income from continuing operations                     |                |               
|Loss from discontinued operations, net of tax benefit |                |               
|                                                      |                |               
|Net income                                            |                |               
|                                                      |                |               
|Basic income (loss) per share:                        |                |               
|Continuing operations                                 |                |               
|Discontinued operations                               |                |               
|                                                      |                |               
|Total                                                 |                |               
|                                                      |                |               
|Diluted income (loss) per share:                      |                |               
|Continuing operations                                 |                |               
|Discontinued operations                               |                |               
|                                                      |                |               
|Total                                                 |                |               
|                                                      |                |               
|Weighted-average shares outstanding - Basic           |                |               
|                                                      |                |               
|                                                      |                |               
|Weighted-average shares outstanding - Diluted         |                |               
|                                                      |                |               

The accompanying notes
are an integral part of these consolidated financial statements.

4

---

Stein Mart,
Inc.Consolidated Statements of Cash Flows  (Unaudited)(In thousands)

|                                                     | For The 26 Weeks Ended
|---------------------------------------------------- | ----------------------
|
|Cash flows from operating activities:                |                       
|Net income                                           |                       
|Adjustments to reconcile net income to net cash      |                       
|provided by operating activities:                    |                       
|Depreciation and amortization                        |                       
|Impairment (recovery) of property and other assets   |                       
|Store closing charges                                |                       
|Deferred income taxes                                |                       
|Restricted stock compensation                        |                       
|Tax benefit from exercise of stock options           |                       
|Changes in assets and liabilities:                   |                       
|Trade and other receivables                          |                       
|Inventories                                          |                       
|Prepaid taxes                                        |                       
|Prepaid expenses and other current assets            |                       
|Other assets                                         |                       
|Accounts payable                                     |                       
|Accrued liabilities                                  |                       
|Income taxes payable                                 |                       
|Other liabilities                                    |                       
|                                                     |                       
|Net cash provided by operating activities            |                       
|                                                     |                       
|Cash flow from investing activities:                 |                       
|Capital expenditures                                 |                       
|Purchases of short-term investments                  |                       
|Sales of short-term investments                      |                       
|                                                     |                       
|Net cash used in investing activities                |                       
|                                                     |                       
|Cash flows from financing activities:                |                       
|Net payments under notes payable to banks            |                       
|Dividends paid                                       |                       
|Proceeds from exercise of stock options              |                       
|Proceeds from employee stock purchase plan           |                       
|Purchases of common stock                            |                       
|                                                     |                       
|Net cash provided by (used in) financing activities  |                       
|                                                     |                       
|Net (decrease) increase in cash and cash equivalents |                       
|Cash and cash equivalents at beginning of year       |                       
|                                                     |                       
|Cash and cash equivalents at end of period           |                       
|                                                     |                       
|Supplemental disclosures of cash flow information:   |                       
|Income taxes paid                                    |                       
|Interest paid                                        |                       

The accompanying notes
are an integral part of these consolidated financial statements.

5

---

STEIN MART, INC.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  July 30, 2005(Unaudited) (Dollars in tables in
thousands, except per share amounts)

# 1.     Basis of Presentation

The accompanying unaudited
consolidated financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the instructions to Form
10-Q. Accordingly, they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair statement have been included. Operating results for the 26-week
periods are not necessarily indicative of the results that may be expected for the entire
year. For further information, refer to the consolidated financial statements and
footnotes thereto included in the Stein Mart, Inc. annual report on Form 10-K for the year
ended January 29, 2005.

The Company has reclassified its
auction rate securities of $18.1 million, previously classified in Cash and cash
equivalents, as Short-term investments on the Consolidated Balance Sheet
as of July 31, 2004 to be consistent with the classification in the consolidated financial
statements for the year ended January 29, 2005. Corresponding adjustments have been made
to the prior periods Consolidated Statement of Cash Flows to reflect purchases and
sales of auction rate securities as investing, rather than as a component of cash and cash
equivalents. Certain other reclassifications have also been made to the 2004 consolidated
financial statements to conform to the 2005 presentation.

# 2.     Stock-Based
Compensation

The Company currently follows the
disclosure-only provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation, as
amended by SFAS No. 148. Accordingly, no compensation cost has been recognized for the
Companys stock option plans. Restricted stock awards issued by the Company are
accounted for in accordance with Accounting Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees. The employee compensation cost
is included in net income, as reported, throughout the vesting period. Had the
compensation cost of the Companys stock-based plans been recorded consistent with
the provisions of SFAS No. 123, the Companys net income and earnings per share would
have been changed to the following pro forma amounts:

|                                              
|----------------------------------------------
|July 30,
2005                                 
|Net income - as reported                      
|Add:  Restricted stock-based employee         
|compensation expense included in reported     
|net income, net of related tax effects        
|Deduct:  Total stock-based employee           
|compensation expense determined under the     
|fair value based method for all awards, net of
|related tax effects                           
|                                              
|Net income - pro forma                        
|                                              
|Basic earnings per share - as reported        
|Diluted earnings per share - as reported      
|Basic earnings per share - pro forma          
|Diluted earnings per share - pro forma        

6

---

# STEIN MART, INC.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

In December 2004, the FASB issued
SFAS No. 123R, Share-Based Payment, which revises SFAS No. 123 and supersedes
APB Opinion No. 25. This Statement focuses primarily on accounting for transactions in
which an entity obtains employee services in share-based payment transactions. This
Statement requires an entity to recognize the cost of employee services received in
share-based payment transactions and measure the cost of the award at fair value on the
grant date. That cost will be recognized over the period during which an employee is
required to provide service in exchange for the award. As amended by the Securities
Exchange Commission in April 2005, the provisions of SFAS No. 123R are effective no later
than the beginning of the first fiscal year that begins after June 15, 2005. Accordingly,
the Company will adopt SFAS No. 123R in the first quarter of 2006. The Company is
evaluating the requirements of SFAS No. 123R and has not yet determined the effect of
adopting SFAS No. 123R, nor has the Company determined whether the adoption will result in
amounts that are similar to the current pro forma disclosures under SFAS No. 123.

# 3.     Discontinued
Operations

One store that closed during 2004
resulted in the exit from a market. SFAS No. 144 requires closed stores to be classified
as discontinued operations when the operations and cash flows of the stores have been
eliminated from ongoing operations. There are no discontinued operations included in
operating results for 2005. During the first half of 2004, discontinued operations
generated sales of $0.9 million, loss from operations of $0.2 million, income tax benefit
of $0.1 million and loss from discontinued operations, net of tax benefit of $0.1 million.
See Note 4 for a description of store closing costs included in loss from discontinued
operations for the first half of 2004.

# 4.     Store Closing Charges
and Impairment of Long-Lived Assets

The Company closed six stores during
the first half of 2005 incurring $0.9 million of lease termination and severance costs.
One more store is planned to close during the fourth quarter of 2005. Lease termination
fees of $150,000 were also incurred during the first half of 2005 related to the upcoming
store closing.

The Company closed seven stores
during 2004, six of which were closed during the first half of 2004. Lease termination and
severance costs were $0.7 million during the first half of 2004. All store closing charges
are included in selling, general and administrative expenses in the Consolidated
Statements of Operations, except for $154,000 in 2004 which is included in loss from
discontinued operations for the 26-weeks ended July 31, 2004.

The following tables show the
activity in the store closing reserve for the first half of 2005 and 2004:

|                           
|---------------------------
|Continuing operations:     
|Lease termination costs    
|Severance                  
|                           
|Total store closing reserve
|                           

7

---

# STEIN MART, INC.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

|                           
|---------------------------
|Continuing operations:     
|Lease termination costs    
|Severance                  
|Other                      
|                           
|                           
|                           
|Discontinued operations:   
|Lease termination costs    
|Severance                  
|                           
|                           
|                           
|Total store closing reserve
|                           

The store closing reserve at July 30,
2005, January 29, 2005 and July 31, 2004 includes a current portion (in accrued
liabilities) of $2.4 million, $3.0 million and $3.5 million, respectively, and a long-term
portion (in other liabilities) of $3.3 million, $4.0 million and $4.0 million,
respectively.

The tables below set forth the
components of loss from operations for all stores closed during 2005 and 2004. The 2005
tables present the losses from the six stores that closed during the first half of 2005.
The 2004 tables present the sum of the losses from the six stores that closed during the
first half of 2005 and the seven stores closed during fiscal year 2004.

|                                            
|--------------------------------------------
|13 weeks ended July 30, 2005:               
|Sales                                       
|Cost of sales                               
|                                            
|Gross profit                                
|Selling, general and administrative expenses
|Other income, net                           
|                                            
|Loss from operations                        
|                                            
|# of stores closed in 2005                  
|                                            
|                                            
|13 weeks ended July 31, 2004:               
|Sales                                       
|Cost of sales                               
|                                            
|Gross profit                                
|Selling, general and administrative expenses
|Other income, net                           
|                                            
|Loss from operations                        
|                                            
|# of stores closed in 2005 and 2004         
|                                            

8

---

# STEIN MART, INC.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

|                                            
|--------------------------------------------
|26 weeks ended July 30, 2005:               
|Sales                                       
|Cost of sales                               
|                                            
|Gross profit                                
|Selling, general and administrative expenses
|Other income, net                           
|                                            
|Loss from operations                        
|                                            
|# of stores closed in 2005                  
|                                            
|                                            
|26 weeks ended July 31, 2004:               
|Sales                                       
|Cost of sales                               
|                                            
|Gross profit                                
|Selling, general and administrative expenses
|Other income, net                           
|                                            
|Loss from operations                        
|                                            
|# of stores closed in 2005 and 2004         
|                                            

# 5.     Revolving Credit
Facility

The Company has a three-year $150
million senior revolving credit agreement (the Agreement) with a group of
lenders, with an initial term ending July 2006. Under the terms of the Agreement, the
Company has the option to increase the facility by an additional $25 million and to extend
the terms for an additional year. The Company had stand-by letters of credit of $7.0
million at July 30, 2005. At July 30, 2005 there were no direct borrowings under the
credit facility and no Event of Default existed under the terms of the Agreement.

# 6.     Stockholders
Equity and Earnings Per Share

During the first half of 2005, the
Company repurchased 296,550 shares of its common stock in the open market at a cost of
$6.6 million. As of July 30, 2005, there are 1,697,650 shares which can be repurchased
pursuant to the Board of Directors current authorization.

Basic earnings per share is computed
by dividing net income by the weighted-average number of common shares outstanding for the
period. Diluted earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding plus common stock equivalents related
to stock options for each period.

A reconciliation of weighted-average
number of common shares to weighted-average number of common shares plus common stock
equivalents is as follows (000s):

|                                        
|----------------------------------------
|July 30,
2005                           
|Weighted-average number of common shares
|Stock options                           
|                                        
|Weighted-average number of common shares
|plus common stock equivalents           
|                                        

9

---

# Stein Mart, Inc.

|ITEM 2. | MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS
|------- | ------------------------------------------------------------------------------------

This document includes a number of
forward-looking statements which reflect the Companys current views with respect to
future events and financial performance. Wherever used, the words plan,
expect, anticipate, believe, estimate and
similar expressions identify forward looking statements.

Any such forward-looking statements
contained in this document are subject to risks and uncertainties that could cause the
Companys actual results of operations to differ materially from historical results
or current expectations. These risks include, without limitation, ongoing competition from
other retailers many of whom are larger and have greater financial and marketing
resources, the availability of suitable new store sites at acceptable lease terms, ability
to successfully implement strategies to exit or improve under-performing stores, changing
preferences in apparel, changes in consumer spending due to current events and/or general
economic conditions, the effectiveness of advertising, marketing and promotional
strategies, adequate sources of merchandise at acceptable prices, and the Companys
ability to attract and retain qualified employees to support planned growth.

The Company does not undertake to
publicly update or revise its forward-looking statements even if experience or future
changes make clear that any projected results expressed or implied therein will not be
realized.

# Overview

Stein Marts 259 stores offer
the fashion merchandise, service and presentation of a better department or specialty
store, at prices competitive with off-price retail chains. Currently with locations from
California to New York, Stein Marts focused assortment of merchandise features
moderate to designer brand-name apparel for women, men and young children, as well as
accessories, gifts, linens and shoes. Management believes that Stein Mart differentiates
itself from typical off-price retailers by offering: (i) current-season merchandise
carried by better department and specialty stores at value prices, (ii) a stronger
merchandising statement, with more depth of color and size, and (iii)
merchandise presentation more comparable to other upscale retailers.

The Company faces competition for
customers and for access to quality merchandise from better department stores, fine
specialty stores and, to a lesser degree, from off-price retail chains. Many of these
competitors are units of large national or regional chains that have substantially greater
resources than the Company. The retail apparel industry is highly fragmented and
competitive, and the off-price retail business may become even more competitive in the
future.

During the second quarter ended July
30, 2005, comparable store sales increased 3.0% on top of last years 10.3% gain.
Better-than-expected full-price selling of the seasonal transition merchandise assortment,
coupled with an accelerated clearance program, resulted in net income more than doubling
to $11.6 million compared to $5.7 million in the year ago quarter. The largest contributor
to improved net income was gross profit, which increased to $96.3 million from $83.9
million in the year ago quarter. As a percent of net sales, gross profit increased
primarily from higher initial mark-up and decreased markdowns. Selling, general and
administrative expenses, as a percent of net sales, decreased 0.3 percentage point due to
better expense productivity. On an average stores basis, inventories were approximately
flat compared to last year.

During the first half of 2005,
comparable store sales increased 3.1% on top of last years 11.1% gain. Again, the
sales improvement came from more full-price selling and a more productive clearance cycle.
Net income increased 65% to $28.4 million from $17.2 million last year. Gross profit
increased to $208.0 million compared to $182.7 million in 2004. As a percent of net sales,
gross profit increased primarily from higher initial mark-up and decreased markdowns. The
Companys performance has also benefited from closing seven under-performing stores
in 2004 and six in the first half of 2005. These stores had operating losses of $1.3
million and $2.9 million in the first half of 2005 and 2004, respectively.

10

---

# Stein Mart, Inc.

Our progress each quarter is the
direct result of the traction we continue to gain from:

| |  | focusing
our fashion assortments,
| | - | ---------------------------------

| |  | tailoring
our merchandise delivery and promotional timetables to a higher freshness level,
| | - | ------------------------------------------------------------------------------------------

| |  | targeting
our marketing efforts, and
| | - | ------------------------------------

| |  | improving
the quality of our store real estate portfolio.
| | - | ---------------------------------------------------------

# Outlook

During the third quarter of 2005, the
Company will continue to focus on the following:

| |  | Increase
comparable store sales in the mid-single-digit range
| | - | -------------------------------------------------------------

| |  | Improve
gross margin as a result of fewer markdowns on a larger percentage of current merchandise
| | - | -------------------------------------------------------------------------------------------------

| |  | Maintain
a strong cash position with no debt, expected annual capital expenditures of
approximately $30 million, payment of a quarterly dividend to shareholders, and continued
repurchasing of Company stock.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Stores

There were 259 stores open as of July
30, 2005 and 257 as of July 31, 2004. A total of eight new stores, including one
relocation, are planned to open in 2005 and a total of seven stores will close in 2005.

|                               
|-------------------------------
|July 30,
2005                  
|Stores at beginning of period  
|Stores opened during the period
|Stores closed during the period
|                               
|Stores at the end of period    
|                               

# Results of Operations

The following table sets forth each
line item of the Consolidated Statements of Operations expressed as a percentage of the
Companys net sales (numbers may not add due to rounding):

|                                               
|-----------------------------------------------
|July 30,
2005                                  
|Net sales                                      
|Cost of merchandise sold                       
|                                               
|Gross profit                                   
|Selling, general and administrative expenses   
|Other income, net                              
|                                               
|Income from operations                         
|Interest income                                
|Interest expense                               
|                                               
|Income from continuing operations before income
|taxes                                          
|Provision for income taxes                     
|                                               
|Income from continuing operations              
|Loss from discontinued operations, net of tax  
|benefit                                        
|                                               
|Net income                                     
|                                               

11

---

# Stein Mart, Inc.

# Store Closings

The Company closed six stores during
the first half of 2005 and plans to close one more store during the fourth quarter of
2005. Seven stores were closed during 2004, six of which were closed during the first half
of 2004. One store that closed during 2004 resulted in the exit from a market and, in
accordance with SFAS No. 144, is classified as discontinued operations as cash flows from
this store have been eliminated from ongoing operations.

Sales and operating losses for the
six stores closed in 2005 and the seven stores closed during fiscal year 2004 are shown
below for the 13 weeks and 26 weeks ended July 30, 2005 and July 31, 2004. Included in the
2004 column are operating results of the seven stores closed in 2004, in addition to six
stores closed in 2005.

|                                    
|------------------------------------
|July 30,
2005                       
|Sales from closed stores:           
|Included in continuing operations   
|Included in discontinued operations 
|                                    
|                                    
|                                    
|Operating losses from closed stores:
|Included in continuing operations   
|Included in discontinued operations 
|                                    
|                                    
|                                    

Operating losses from closed stores
include the following store closing and asset impairment (recovery) charges:

|                                   
|-----------------------------------
|July 30,
2005                      
|Continuing operations:             
|Lease termination costs            
|Asset impairment (recovery) charges
|Severance                          
|Other                              
|                                   
|                                   
|                                   
|Discontinued operations:           
|Lease termination costs            
|Severance                          
|                                   
|                                   
|                                   
|Total                              
|                                   

# Continuing Operations

For the 13 weeks ended July 30,
2005 compared to the 13 weeks ended July 31, 2004

The 5.1% total increase in net sales
for the 13 weeks ended July 30, 2005 from the same 2004 period reflects a 3.0% increase in
net sales from comparable stores and the opening of four new stores and the closing of six
stores during the first half of 2005.

Gross profit for the 13 weeks ended
July 30, 2005 was $96.3 million or 28.6 percent of net sales, a 2.4 percentage point
increase over gross profit of $83.9 million or 26.2 percent of net sales for the second
quarter of 2004. Mark-up improved 1.2 percentage point, markdowns decreased by 1.0
percentage point, shrinkage expense decreased 0.1 percentage point and occupancy costs
decreased 0.1 percentage point.

12

---

# Stein Mart, Inc.

Selling, general and administrative (SG&A)
expenses  were $81.5 million or 24.2 percent of net sales for the 13
weeks ended July 30, 2005, as compared to $78.4 million or 24.5 percent of net sales for
the same 2004 quarter. The 0.3 percentage point decrease in SG&A expenses as a percent
of net sales is primarily due to the leveraging of expenses as a result of the 3.0 percent
increase in comparable store sales.

The Company earned interest income of
$433,000 and $73,000 on its cash and short-term investments during the second quarter of
2005 and 2004, respectively.

For the 26 weeks ended July 30,
2005 compared to the 26 weeks ended July 31, 2004

The 4.9% total increase in net sales
for the 26 weeks ended July 30, 2005 from the same 2004 period reflects a 3.1% increase in
net sales from comparable stores, the opening of four new stores and the closing of six
stores.

Gross profit for the 26 weeks ended
July 30, 2005 was $208.0 million or 29.0 percent of net sales a 2.3 percentage point
increase over gross profit of $182.7 million or 26.7 percent of net sales for the first
half of 2004. Mark-up improved 1.1 percentage point, markdowns decreased 0.9 percentage
point, shrinkage expense decreased 0.2 percentage point and occupancy costs decreased 0.1
percentage point.

Selling, general and administrative (SG&A)
expenses were $170.5 million or 23.8 percent of net sales for the
26 weeks ended July 30, 2005, as compared to $161.9 million or 23.7 percent of net sales
for the same 2004 period. The 0.1 percentage point increase in SG&A expenses as a
percent of net sales is primarily due to higher store closing charges in the first half of
2005 compared to the first half of 2004. Included in SG&A expenses for the first half
of 2005 are store closing charges of $1.2 million, including $0.1 million in lease
termination fees related to a future store closing. Store closing charges, net of asset
impairment recoveries, were $0.5 million for the first half of 2004.

The Company earned interest income of
$827,000 and $73,000 on its cash and short-term investments during the first half of 2005
and 2004, respectively. The Company has not borrowed on its revolving credit agreement
since the first quarter of 2004.

# Liquidity and Capital
Resources

The Companys primary source of
liquidity is the sale of its merchandise inventories. Capital requirements and working
capital needs are funded through a combination of internally generated funds, a revolving
credit facility and credit terms from vendors. Working capital is needed to support store
inventories and capital investments for new store openings and to maintain existing
stores. Historically, the Companys working capital needs are lowest in the first
quarter and highest in either the third or fourth quarter in anticipation of the fourth
quarter peak selling season. As of July 30, 2005, the Company had $18.9 million in cash
and cash equivalents and $76.0 million in short-term investments.

Net cash provided by operating
activities was $15.3 million for the first half of 2005 compared to $58.5 million for the
first half of 2004. More cash was used by operating activities during the first half of
2005 compared to the first half of 2004 primarily due to a $26.3 million decrease in
accounts payable during the first half of 2005 compared to a $17.4 million increase in
accounts payable during the first half of 2004. This significant change in accounts
payable is due to an increase in the year-end 2004 accounts payable balance compared to
the year-end 2003 balance resulting from more current merchandise receipts at the end
2004.

Net cash used in investing activities
was $19.4 million for the first half of 2005 compared to $27.8 million for the first half
of 2004. Cash provided by operations during the first half of 2004 and 2005 enabled the
Company to invest in short-term investments. Capital expenditures, primarily for the
acquisition of store fixtures, equipment and leasehold improvements and information system
enhancements, were $15.9 million and $9.8 million for the first half of 2005 and 2004,
respectively. Capital expenditures were higher in the first half of 2005 compared to the
first half of 2004 due primarily to enhancements to the point of sale system and
remodeling costs for existing

13

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# Stein Mart, Inc.

stores.           Total 2005 capital
expenditures, which include ongoing enhancements to the point           of sale system
and inventory management system developments, are anticipated to           be
approximately $30 million.

Net cash provided by financing
activities was $2.8 million during first half of 2005 compared to net cash used in
financing activities of $21.6 million during the first half of 2004. More cash was used in
financing activities during the first half of 2004 as a result of the Company eliminating
borrowings under its revolving credit agreement. In May 2005, the Company announced an
annual cash dividend of $0.25 per share, to be paid quarterly. The first dividend payment
of $0.0625 per share was paid in June 2005. In August 2005, the Board of Directors
approved the second quarterly dividend of $0.0625 per share which will be paid in
September 2005.

The Company has a $150 million senior
revolving credit agreement with a group of lenders, with an initial term ending July 2006.
Borrowings are based on and secured by eligible inventory and certain other assets. At
July 30, 2005 there were no direct borrowings under the credit facility and no Event of
Default existed under terms of the Agreement.

The Company believes that expected
net cash provided by operating activities and unused borrowing capacity under the
revolving credit agreement will be sufficient to fund anticipated current and long-term
capital expenditures, working capital requirements and dividend payments. Should current
operating conditions deteriorate, management can borrow on the revolving credit agreement
or adjust operating plans, including new store rollout.

# Contractual Obligations

To facilitate an understanding of the
Companys contractual obligations, the following payments due by period data is
provided:

|                
|----------------
|Operating leases
|                

At July 30, 2005, the Company had no
direct borrowings on its credit facility. Other long-term liabilities on the balance sheet
include deferred income taxes, deferred compensation and other long-term liabilities that
do not have specific due dates, so are excluded from the preceding table. Other long-term
liabilities also include long-term store closing reserves, a component of which is future
minimum payments under non-cancelable leases for closed stores, net of estimated sublease
income. These future minimum lease payments total $15.3 million and are included in the
above table.

Off-Balance Sheet
Arrangements

The Company has outstanding standby
letters of credit totaling $7.0 million securing certain insurance programs at July 30,
2005. If certain conditions occurred under these arrangements, the Company would be
required to satisfy the obligations in cash. Due to the nature of these arrangements and
based on historical experience, the Company does not expect to make any payments;
therefore, the letters of credit are excluded from the preceding table. There are no other
off-balance sheet arrangements that could affect the financial condition of the Company.

# Seasonality

The Companys business is
seasonal in nature with a higher percentage of the Companys merchandise sales and
earnings generated in the fall and holiday selling seasons. Accordingly, selling, general
and administrative expenses are typically higher as a percent of net sales during the
first three quarters of each year.

|Item 3. | Quantitative
and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

The Company is exposed to interest
rate risk primarily through borrowings under its revolving credit facility. The Company
eliminated borrowings under its credit facility during the first quarter of 2004 and, at
July 30, 2005, had no direct borrowings on its credit facility.

14

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# Stein Mart, Inc.

|Item 4. | Controls
and Procedures
|------- | -----------------------

The Companys management,
including the Chief Executive Officer and Chief Financial Officer, have evaluated the
effectiveness of the Companys disclosure controls and procedures, as defined in
Exchange Act Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended, (the
Exchange Act). Based upon this evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure controls and
procedures were effective as of July 30, 2005. There have been no changes in the
Companys internal controls over financial reporting identified in connection with
this evaluation that occurred during the quarter ended July 30, 2005 that have affected,
or are reasonably likely to materially affect, the Companys internal controls over
financial reporting.

# PART II  OTHER
INFORMATION

|Item 2. | Unregistered
Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

The following table provides
information regarding repurchases by the Company of its common stock during the 13-week
period ended July 30, 2005:

|ISSUER PURCHASES OF EQUITY SECURITIES
|-------------------------------------
|Period (1)                           
|May 1, 2005 - May 28, 2005           
|May 29, 2005 - July 2, 2005          
|July 3, 2005 - July 30, 2005         
|                                     
|Total                                
|                                     

|(1) | Monthly
information is presented by reference to the Companys fiscal           months
during the period covered by this Quarterly Report on Form 10-Q.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The
Companys Open Market Repurchase Program is conducted pursuant to
          authorizations made from time to time by the Companys Board of Directors.
          The shares reported in the table are covered by a Board authorization to
          repurchase 2.5 million shares of common stock announced on March 5, 2001 which
          does not have an expiration date.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

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# Stein Mart, Inc.

|Item 4. | Submission
of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

The Annual Meeting of Stockholders
of Stein Mart, Inc. was held on June 7, 2005. At the meeting,  the  stockholders  elected
all of the Company's directors to serve for one-year terms.  The vote for each nominee
for director was as follows:

|Name of Director         | Votes For  | Votes
Withheld
|------------------------ | ---------- | --------------
|Alvin R. Carpenter       | 40,810,987 | 137,013       
|Linda McFarland Farthing | 36,740,751 | 4,207,249     
|Michael D. Fisher        | 37,929,363 | 3,018,637     
|Mitchell W. Legler       | 37,574,958 | 3,373,042     
|Michael D. Rose          | 40,446,917 | 501,083       
|Richard L. Sisisky       | 37,442,674 | 3,505,326     
|Jay Stein                | 37,911,503 | 3,036,497     
|Martin E. Stein, Jr      | 39,498,406 | 1,449,594     
|J. Wayne Weaver          | 40,811,299 | 136,701       
|John H. Williams, Jr     | 37,911,568 | 3,036,432     
|James H. Winston         | 37,440,142 | 3,507,858     

The  stockholders  also voted to
approve the Stein Mart,  Inc.  Management  Incentive  Compensation  Plan. The vote was
37,558,030 for, 363,155 against and 401,161 abstentions.

|Item 6. | Exhibits
|------- | --------

31.1 Certification of Chief
Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a)  31.2 Certification of Chief
Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a)  32.1 Certification of the
Chief Executive Officer Pursuant to 18 U.S.C. Section 1350  32.2 Certification of the
Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

16

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# SIGNATURES

Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

|                        |                                      
|----------------------- | -------------------------------------
|                        | Stein Mart, Inc.                     
|Date: September 7, 2005 | By:  /s/ Michael D. Fisher           
|                        | Michael D. Fisher                    
|                        | President and Chief Executive Officer
|                        | /s/ James G. Delfs                   
|                        | James G. Delfs                       
|                        | Senior Vice President and Chief      
|                        | Financial Officer                    

17