Financial Reports: Coldwater Creek, Restoration Hardware

Net Income Heats Up at Coldwater Creek

Sandpoint, ID-based women’s apparel merchant Coldwater Creek (Nasdaq: CWTR) rode higher sales in all channels to more than double its bottom line.

For the quarter ended July 30, net income was $7.0 million, compared with $3.3 million for the second quarter of last year.

Sales increased 39%, to $154.6 million. Direct sales increased 19%, to $59.4 million, on a 17% increase in catalog circulation. Web sales jumped 49%, to $38.8 million. “The success of our e-mail marketing campaigns continues to support the growth of our Internet channel, which represented nearly two-thirds of our direct segment net sales for the quarter,” chairman/CEO Dennis Pence said in a statement. “We see further opportunity to expand this important part of the business as we build on our growing list of 2.5 million e-mail addresses.”

Retail sales increased 55% to $95.2 million, mostly to new store openings.

Direct-to-Consumer Drives Restoration Hardware
Direct sales contributed to significant sales increases at Corte Madera, CA-based cataloger/retailer Restoration Hardware (Nasdaq: RSTO).

Catalog and Web revenue rose 50%, to $75.7 million for the three weeks ended July 30. As if the results weren’t impressive enough, the direct increase comes on top of a 103% increase last year.

Total revenue for the quarter increased 20%, to $144.8 million, compared with $120.9 million for the second quarter of last year. Comparable store sales rose 6%.

The company restoration incurred $1.6 million in costs associated with remodeling at its stores, however. Including a noncash charge, net results on a GAAP basis for the second quarter of fiscal 2005 was a loss of $2.5 million, compared with a net loss of $1.9 million a year ago.

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