Financial Reports: Penney, Hanover, Federated, Williams-Sonoma, and More

Quarterly Catalog Sales Decrease 11.9% at Penney

Plano, TX—First-quarter catalog sales at general merchandise giant J.C. Penney (NYSE: JCP) fell nearly 12%. And in a statement, the company admitted that given the sluggish economy, it expects the catalog’s performance to “weaken.” Nonetheless, the cataloger/retailer posted net income of $41 million for the 13 weeks ended April 28. Total company revenue, including sales from its Eckerd drugstore chain, were down less than 1%, to $7.52 billion from $7.53 billion a year ago. Sales from the Penney department stores and catalog fell 3%, to $4.06 billion from $4.20 billion.

Penney reported first-quarter income from continuing operations, before the effects of noncomparable items, of $0.11 a share compared to $0.13 a share last year. Including the noncomparable items, income from continuing operations was $0.13 a share, compared to a net loss of $0.63 per share last year.

Fingerhut Downsizing Boosts Operating Income

Cincinnati—Following significant circulation cuts and other strategic downsizing efforts, the Fingerhut Cos. catalog division of Federated Department Stores (NYSE: FD) posted a 42% decline in first-quarter sales. For the three months ended May 5, Fingerhut sales were $266.0 million, compared with $459.0 million for the first quarter of fiscal 2000. The Fingerhut division (which includes the Arizona Mail Order, Lew Magram, and Bedford Fair catalogs) posted operating income of $30.0 million for the quarter, a turnaround from its $3.0 million operating loss a year prior.

Federated’s overall first-quarter net sales fell 5%, to $3.82 billion from $4.03 billion. Net income dropped 35%, to $58.0 million from $89.0 million last year. The company’s businesses include the Bloomingdale’s, Burdines, and Rich’s department-store chains and Macys.com, Bloomingdales.com, and Bloomingdale’s by Mail.

Earnings Down at Williams-Sonoma

San Francisco–Housewares and home decor cataloger/retailer Williams-Sonoma (NYSE: WSM) posted $500,000 in first-quarter net earnings, down from $4.8 million a year ago. The bottom-line damage came despite a 14% rise in net revenue, to $417.6 million from $365.3 million last year. Led by the Pottery Barn Kids catalog and the Williams-Sonoma and Pottery Barn Web divisions, direct-to-customer sales also increased 14%, to $167.7 million. And retail sales rose 14% as well, to $223 million. Williams-Sonoma also produces the Hold Everything and Chambers catalogs.

Hanover Boosts Sales, Cuts Loss for 1Q

Weehawken, NJ—A 4% boost in circulation contributed to an 11% jump in first-quarter sales for Hanover Direct (Amex: ANV). The multititle mailer’s core brands—bedding catalogs Domestications and The Company Store, home-improvement merchandise book Improvements, and plus-size women’s apparel catalog Silhouettes—accounted for most of the revenue growth. (The company’s other catalogs include men’s apparel title International Male and upscale decor and gifts book Gump’s by Mail.) For the three months ended March 31, net revenue was $144.3 million, up from $130.1 million a year prior. Hanover also slashed its net loss 43%, to $7.6 million from $13.4 million last year.

Nordstrom Net Earnings Down 24%

Seattle—Cataloger/retailer Nordstrom (NYSE: JWN) reported net earnings of $24.8 million for the first quarter of fiscal 2001, down 24% from $32.8 million last year.

Net sales for the quarter rose nearly 6%, to $1.22 billion from $1.15 billion. Sales at Nordstrom.com, the Internet and catalog division, were $69.7 million, up just 2% from last year. Worse, comparable-store sales fell nearly 4%.

The Sportsman’s Guide Takes Aim on Smarter Mailings

South St. Paul, MN—Mailing smarter has paid off for Sportsman’s Guide (Nasdaq: SGDE). Having trimmed catalog circulation 25% and combined its clothing and footwear specialty catalogs with its core monthly catalogs, the outdoor and hunting equipment cataloger whittled its first-quarter net loss down to $167,000 from $922,000 last year. Sales increased 8%, to $38.9 million from $35.9 million.

Tiffany 1Q Catalog/Web Sales Up 15%

New York—Even upscale jeweler and gifts marketer Tiffany & Co. (NYSE: TIF) isn’t immune from the effects of the economic slowdown. The company’s first-quarter net sales fell 3%, to $336. 4 million. Nonetheless, direct marketing sales, which include revenue from the corporate sales division as well as from the catalogs, rose 11%, to $31.0 million. Catalog and Internet sales jumped 15%. And net earnings for the three months ended April 30 were $30.8 million, up 1% from $30.4 million the previous first quarter.

Riddell Sports Lessens Net Loss

New York—Manufacturer/marketer Riddell Sports (Amex: RDL), which includes the Varsity Spirit cheerleading apparel catalog, cut its first-quarter net loss by more than half on a 3% rise in revenue. For the first quarter of 2001, Riddell lost $2.9 million on sales of $40.6 million. Last year’s first-quarter loss was $6.7 million on $39.3 million in revenue. Riddell says its lower net loss in 2001 was largely the result of a $4.5 million tax benefit taken in the first quarter of 2001, whereas no tax benefit was taken during the same period last year.

SkyMall Cuts Loss, Loses Revenue

Phoenix–Inflight co-op cataloger SkyMall (Nasdaq: SKYM), which is being bought by Gemstar-TV Guide, cut its first-quarter net loss 78% despite a 9% drop in revenue. For the three months ended March 31, SkyMall posted a loss of $1.4 million before interest, taxes, depreciation and amortization (EBITDA) on $18.2 million in revenue. Last year the company had a $6.3 million loss before EBITDA on sales of $20.0 million.

Vermont Teddy Bear’s Bullish First Quarter

Shelburne, VT– The Vermont Teddy Bear Co. (NASDAQ: BEAR) increased first-quarter sales 30% while boosting its income before taxes 57%. For the three months ended March 31, the multichannel/marketer of stuffed bears posted pretax income of $2.7 million on sales of $14.2 million. A year ago it reported income of $1.7 million on $10.9 million in revenue.

iParty Lessens Net Loss

Boston–Let the iParty (AMEX:IPT) begin! The marketer of party supplies reported a consolidated first-quarter net loss of $1.7 million, less than one-third of last year’s consolidated net loss of $5.5 million. The cataloger/retailer reported $8.9 million in revenue, compared to just $147,000 a year ago.