Financial Reports: Office Depot, PC Connection, Blair, More

Catalog Sales Soft at Office Depot

Delray Beach, FL-based Office Depot, which mails the Viking Office Products catalog, posted a 46% jump in first-quarter net income. Earnings for the three months ended March 27 were $115.6 million, compared with $79.2 million last year. Total sales rose 18%, to $3.6 billion from $3.1 billion the previous fourth quarter.

All was not rosy, however, as the company said that its catalog businesses continue to experience “softness.” The Business Services group, which incudes the direct businesses, had flat sales for the quarter.

“While our domestic catalog businesses remained soft compared to the prior year, Office Depot brand catalog sales did achieve plan and are on track to reach positive sales growth in the second half of the year,” chairman/CEO Bruce Nelson said in a statement.

Global e-commerce sales increased 27%, to $762 million. North American retail sales increased 5%, thanks to increased sales of technology products.

“Special charges” Eat at PC Connection Income
Merrimack, NH-based PC Connection (Nasdaq: PCCC) enjoyed a 16% rise in first-quarter sales. For the three months ended March 31, revenue was $327.6 million, compared with $283.5 million for the first quarter of 2003.

Net income fell to $1.2 million, however, from $1.6 million a year ago. According to chief financial officer Mark Gavin, the computer reseller incurred $272,000 in after-tax charges related to an internal review of its GovConnection GSA contract cancellation and a $340,000 charge due to work force reduction. Had these charges not been incurred, pro forma net income would have been $1.8 million.

First-quarter net sales for PC Connection’s small and midsize business (SMB) segment increased 16%, to $207 million. Sales to government and education customers inched up 2%, to $54 million. Sales to large account customers increased 27%, to $66 million. For the quarter PC Connection mailed 7% fewer catalogs–6.1 million–than it had during the first quarter of last year.

Blair Manages Bottom-Line Gain
Despite losses associated with its newer spin-off catalogs and an overall decline in revenue, Warren, PA-based multititle cataloger Blair Corp. managed to wring out a first-quarter bottom-line improvement. For the three months ended March 31, net income was $571,000, up 14% from $500,000 for the first quarter of 2003.

Net sales declined 6%, to $128.6 million from $137.0 million last year. Gross sales from Blair’s Web channel increased 27%, to $24.0 million from $18.9 million last year. But “our core Blair business outperformed initial expectations for the first quarter,” senior vice president/chief financial officer Bryan Flanagan said in a statement.

The results were achieved despite the costs associated with Blair’s Crossing Pointe business; its Allegheny Trail Corp. start-up, a wholesale business targeting outdoor sporting goods and recreational retailers; and the relaunch of menswear catalog Irvine Park. General and administrative costs rose 7% and included costs associated with an engagement of marketing consultancy McKinsey & Co., which Blair retained to conduct a consumer, brand, and strategy study.

Blooming Quarter for 1-800-Flowers
First-quarter sales for Westbury, NY-based multititle gifts, toys, and home products marketer 1-800-Flowers.com increased 8%, to $134.1 million for the three months ended March 28. Net income increased 64%, to $1.9 million. Online revenue rose 15%, to $74.5 million. Telephone-generated revenue fell 3%, to $50.9 million. The company attracted 707,000 new customers, with about 64 % coming online. Of the more than 1.6 million customers who placed orders in the period, 57% were repeat customers. The company’s catalogs incude Plow & Hearth, HearthSong, and The Popcorn Factory.

Energizing Quarter for NBTY
Thanks to increased sales across all of its units as as its July acquisition of the Rexall supplements business, Bohemia, NY-based supplements manufacturer/marketer NBTY reported a 105% increase in first-quarter net income, to $41 million for the quarter ended March 31. Sales rose 58%, to $440 million from $278 million last year.

Revenue from Puritan’s Pride catalog/Internet business increased 35%, to $71 million from $52 million last year. Puritan’s Pride online sales increased 58% for the quarter. Average order size climbed to $79 from $65.

Amazon.com Sales Up 33%

Seattle-based online superstore Amazon.com (NASDAQ:AMZN) announced a 33% rise in first-quarter sales, to $1.53 billion for the three months ended March 31. What’s more, the company turned around last year’s first-quarter net loss of $10 million to report net income of $111 million. Pro forma net income grew, 141% to $97 million from $40 million last year. Overstock.com Reduces 1Q Loss
Salt Lake City-based discount online retailer Overstock.com (Nasdaq: OSTK) reported a 181% leap in first-quarter revenue, to $82.1 million from $29.2 million last year. The company also narrowed its net loss for the quarter to $2.2 million from $3.9 million last year. It attributed the improved results to “improved analytics” in sourcing and marketing as well as to better expense control.

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