For many of the consumer catalogers tracked by Catalog Age, the best thing about the fourth quarter of 2002 was that it marked the end of 2002. Pretty sad, given that most consumer marketers rake in the bulk of their revenue in the fourth quarter.
Among the six consumer catalogers (as opposed to the cataloger/retailers, for whom stores account for at least half of their sales), only women’s apparel mailer Coldwater Creek and wine marketer Geerlings & Wade increased their net income. Last year, 56% of the consumer catalogers posted improved bottom lines.
What’s more, only three of the catalogers — apparel and home goods mailer Blair Corp., women’s apparel marketer J. Jill Group, and Coldwater Creek — posted improved fourth-quarter sales. And J. Jill and Coldwater Creek are both continuing their retail expansion, which no doubt improved their top lines.
In fact, the six cataloger/retailers tracked outperformed the catalogers. Only apparel marketer Talbots saw sales decline, and that by less than 1%. Talbots was also the only cataloger/retailer to suffer a drop in net income. And whereas two of the consumer catalogers (multititle apparel and home goods cataloger Hanover Direct and gifts and home goods mailer Lillian Vernon Corp.) ended the quarter with losses, all of the cataloger/retailers were in the black.
CATALOG AGE SPOTLIGHT ON FOURTH-QUARTER FINANCIALS
Handsome Gains for Sharper Image
Quarter ended: Jan. 31
The facts: Sales of proprietary products accounted for much of the double-digit sales and earnings increases at San Francisco-based The Sharper Image. Revenue for the high-tech gadgets cataloger/retailer increased 32%, to $220.7 million from $166.6 million for the previous fourth quarter. Catalog sales increased 30%, to $50.3 million from $38.6 million. Store sales increased 28%, to $130.5 million from $102.0 million; comparable store sales increased 13%. Internet sales, including auction sales, increased 61%, to $33.1 million from $20.5 million.
The skinny: The Sharper Image’s fourth- quarter net income of $16.8 million is not only a 46% increase over the previous fourth quarter’s earnings but is also a company record.
Penney Profits Up, Catalog Sales Lag
Quarter ended: Jan. 25
The facts: Fourth-quarter income for cataloger/retailer J.C. Penney Co. more than doubled, to $202 million from $95 million in 2001, including one-time items. Much of Plano, TX-based general merchandiser’s gains can be attributed to Eckerd’s chain of drugstores, however.
Quarterly sales inched up, to $9.55 billion from $9.54 billion the previous fourth quarter. In its department store and direct division (which the company links together), quarterly sales fell slightly, to $5.8 billion from $5.9 billion. Catalog sales fell 21% on reduced circulation, while Internet sales increased 21%, to $138 million.
The skinny: Unlike many of its competitors, Penney can boast of an increase — albeit only 2% — in comparable department store sales.
Onward and Upward for Williams-Sonoma
Quarter ended: Feb. 2
The facts: The home furnishings and kitchen accessories cataloger/retailer, whose brands include Pottery Barn, Pottery Barn Kids, Hold Everything, and Chambers, netted $79.8 million, up 15% from $69.4 million for the fourth quarter of fiscal 2001. Net revenue for the quarter, including shipping fees, increased 10%, to $859.0 million from $778.0 million. Catalog and Internet sales increased 9%, to $255.2 million from $233.5 million, aided by the April 2002 launch of the West Elm catalog. Retail sales increased 10%, to $557.1 million, primarily due to 63 new stores in the fourth quarter.
The skinny: Based on its strong showing during last year, especially its fourth quarter, Williams-Sonoma plans to boost catalog circulation 14%-17%. And last month it launched the newest addition to the Pottery Barn family of catalogs, PBTeen.
J. Jill’s Net Income Takes a Dip
Quarter ended: Dec. 28
The facts: Net income at Quincy, MA-based J. Jill Group fell 12%, to $6.2 million from $7.0 million last year. On the other hand, fourth-quarter sales rose nearly 18%, to $107.9 million from $91.7 million. New store openings accounted for most of the increase, however. Sales from the direct segment rose just 3%, to $63.0 million from $60.9 million a year earlier. The company admits that fourth-quarter catalog productivity declined, due to circulation increases and disappointing results of the fall catalog.
The skinny: J. Jill’s annual catalog and online sales increased 4%, to $220.6 million from $212.2 million for fiscal 2001. Web sales continue to gain momentum; the channel accounted for 31% of 2002’s direct sales.
Brookstone on the Up and Up
Quarter ended: Feb. 1
The facts: Fueled by strong sales and healthy margins, tools and gifts cataloger/retailer Brookstone, which mails the Brookstone, Hard-to-Find Tools, and Gardeners Eden catalogs, posted gains on both sides of the ledger. Sales at the Nashua, NH-based marketer increased 9%, to $185.2 million from $169.8 million the previous fourth quarter. Catalog and Internet sales rose 8%, to $30.1 million. Same-store sales rose 8%. Net income jumped 23%, to $27.5 million compared with $22.3 million last year.
The skinny: Catalog sales increased despite circulation cuts as Brookstone mailed primarily to its most profitable customers.
FINANCIAL REPORT
| REVENUE $000 | NET INCOME (LOSS) $000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 12 months prior | Current quarter | Improvement (decline) | 12 months prior | Current quarter | Improvement (decline) | Info as of quarter ended | P/E (as of 3/27/03) | ||
| CONSUMER CATALOGERS | Blair Corp. | $160,533 | $167,941 | 5% | $7,359 | $6,222 | (15%) | 12/31/02 | 9.71 |
| Coldwater Creek | 88,318 | 114,548 | 30% | (963) | 1,512 | NM | 2/1/03 | 18.94 | |
| Geerlings & Wade | 10,772 | 8,264 | (23%) | (910) | 1,402 | NM | 12/31/02 | N/A | |
| Hanover Direct | 136,933 | 128,251 | (6%) | (4,129) | (4,924) | NM | 12/28/02 | N/A | |
| J. Jill Group | 91,710 | 107,850 | 18% | 7,015 | 6,178 | (12%) | 12/28/02 | 13.28 | |
| Lillian Vernon Corp. | 87,022 | 78,333 | (10%) | 2,584 | (4,129) | NM | 11/23/02 | N/A | |
| CATALOGERS/RETAILERS | Brookstone | $169,785 | $185,171 | 9% | $22,273 | $27,483 | 23% | 2/103 | 11.61 |
| J.C. Penney Co. | 9,542,000 | 9,549,000 | 0 | 95,000 | 202,000 | 113% | 1/25/03 | 16.48 | |
| Jos. A. Bank | 67,274 | 77,942 | 16% | 4,408 | 6,410 | 45% | 2/1/03 | 23.64 | |
| Sharper Image | 166,639 | 220,691 | 32% | 11,560 | 16,829 | 46% | 1/31/03 | 16.00 | |
| Talbots | 433,180 | 431,801 | 0 | 32,514 | 28,335 | (13%) | 2/1/03 | 13.02 | |
| Williams-Sonoma | 778,000 | 858,964 | 10% | 69,399 | 79,772 | 15% | 2/2/03 | 21.88 | |
| MARKET INDICES | Dow Jones Industrial Average | 21.93 | |||||||
| Standard & Poor’s 500 Index | 29.32 | ||||||||
| Notes: Price-to-earnings ratios are from various sources NM = not meaningful NA = not available | Source: Tully & Holland | ||||||||