Sales surge in the third quarter

The third quarter of 2004 was strong for most of the publicly traded consumer merchants tracked by Catalog Age. All but two of the 15 companies, or 87%, showed increases in year-over-year sales, up slightly from 81% the previous third quarter.

What's more, 67% of the marketers showed bottom-line improvements. That's up from the third quarter of the previous year, when half of the mailers tracked had seen year-over-year declines.

The strong sales growth and the somewhat less significant profitability improvements reflect increased marketing efforts and higher marketing costs, says Jim Adams, managing director of Wellesley, MA-based investment bank Tully & Holland, which tracks the companies for Catalog Age. “Marketers were aggressive and pushing their product through additional catalog mailings or Web enhancements,” he says.

1-800-Flowers.com stems its losses

Quarter ended: Sept. 26 The facts: Westbury, NY-based 1-800 Flowers.com, whose catalogs include country products title Plow & Hearth, toys catalog HearthSong, and food gifts book Popcorn Factory, reduced its net loss on slightly higher sales. Total revenue increased 2%, to $97.5 million. Online revenue grew 9%, to $53.1 million. Telephone sales tumbled 7%, however, to $37.6 million. On the other side of the ledger, the company managed to chop its net loss 47%, to $2.7 million. The skinny: The bottom-line reduction included a $2.0 million income tax benefit recorded during the quarter, which artificially inflated earnings.

Operating profit rises at J.C. Penney

Quarter ended: Oct. 30 The facts: Plano, TX-based cataloger/retailer J.C. Penney's 86% jump in quarterly earnings included $47 million in one-time charges associated with early debt retirements. Third-quarter operating profit increased 66%, to $346 million. Combined net sales for Penney's department stores and catalog/Internet segment increased 3%, to $4.46 billion, while catalog/Internet sales rose 4%. Comparable department store sales increased 3%. The skinny: The general merchandiser ended the quarter with $14.9 billion in assets — down 22% from the previous third quarter. But that's because it had carried some $7.0 billion in “discontinued operations” in 2003.

Bearish quarter for Vermont Teddy Bear

Quarter ended: Sept. 30 The facts: Shelburne, VT-based Vermont Teddy Bear Co. reported a 23% increase in net revenue, to $6.1 million, thanks primarily to a $1.5 million increase from its Calyx & Corolla fresh-flowers title. Revenue from the PajamaGram and TastyGram gift brands also increased, though corporate/wholesale revenue and retail sales declined. Nonetheless, the gifts merchant was able to whittle down its net loss 12%, to $173,000, The skinny: During the quarter, Vermont Teddy Bear added 60,400 sq. ft. to its Shelburne, VT, distribution center.

Williams Sonoma keeps cooking

Quarter ended: Oct. 31 The facts: San Francisco-based multichannel merchant Williams-Sonoma — whose properties include the Pottery Barn titles, Hold Everything, West Elm, and Williams-Sonoma Home — posted a 19% net earnings increase, to $28.5 million. Third-quarter net revenue, including shipping fees, increased 14%, to $722.8 million. Direct-to-customer net sales increased 18%, to $281.5 million, and Web sales rose 44%, to $118.3 million. The skinny: Despite the strong results it reported for the first nine months of 2004, the company pulled back some on reporting guidance for the remainder of the year, projecting direct-to-customer net sales in the range of $1.152 billion-$1.162 billion, compared with previous guidance of $1.155 billion-$1.170 billion.