Of the 17 publicly traded consumer catalogers and cataloger/retailers tracked by investment bank Ulin & Holland for Catalog Age, 59% suffered a decline in third-quarter revenue. On the earnings side, 59% posted a net loss. The primary reason, in two words: Sept. 11.
But the third-quarter results could have been far worse, contends Jim Adams, managing director of Boston-based Ulin & Holland. If not for previously implemented cost-cutting programs, “some catalogers could have been in dire straits after Sept. 11,” he says. In fact, while 53% of the companies tracked suffered a decline in net income or an increase in their net loss during this most recent third quarter, during the third quarter of 2000, nearly as many — 44% — of the catalogers had suffered the same bottom-line erosion.
CATALOG AGE SPOTLIGHT ON THIRD-QUARTER FINANCIALS
Blair Sees Red (Again)
Warren, PA-based apparel and home goods cataloger Blair Corp. more than quadrupled its third-quarter net loss, as the company put more items on sale to move excess inventory. Blair lost $3.3 million during the three months ended Sept. 30, compared with a loss of $773,477 the previous third quarter. Net sales increased 6%, to $123.0 million from $115.2 million the previous year.
The skinny: As part of its merchandise liquidation strategy, president/CEO/director John Zawacki says, Blair mailed 25% more catalogs — 42.4 million vs. 33.9 million — during the third quarter of 2001 than during the same quarter of 2000.
Delia’s Dramatically Narrows Loss
Teen apparel cataloger/retailer Delia’s slashed its third-quarter net loss from $42.7 million last year to less than $3.2 million for the three months ended Nov. 3. At the same time, the divestitures of noncore properties such as TSI Soccer and Storybook Heirlooms led to a 38% drop in net sales, to $32.5 million from $52.3 million the previous third quarter. Still, New York-based Delia’s core catalog/online/retail sales increased 19%, to $32.5 million from $27.4 million.
The skinny: Delia’s got whacked with $20.6 million in restructuring and one-time charges during the third quarter of 2000. With the restructuring and divestitures behind it, the company can now concentrate on its solid primary business.
Lands’ End Nearly Triples Its Earnings
Dodgeville, WI-based apparel and home goods giant Lands’ End hit one of the quarter’s high notes. For the three months ended Oct. 26, its net income exceeded $12.1 million, nearly triple the earnings of $4.4 million for the comparable quarter of 2000. Revenue totaled $376.1 million, up 4% from $362.3 million the previous year. Sales within the specialty segment, which includes the Lands’ End Corporate Sales catalog, also rose 4%, to $128 million for the quarter. International sales climbed 14%, to $32 million, while Internet sales jumped 32%, to $72 million. And sales from the core catalog business inched up 2%, to $188 million.
The skinny: Merchandise tinkering and inventory cuts helped the bellwether cataloger become leaner in the second half of the year.
Talbots Tightens Its Belt
Expense and inventory controls helped cataloger/retailer The Talbots increase its third-quarter net income 5% despite a 1% decline in total sales. For the three months ended Nov. 3, the Hingham, MA-based apparel marketer posted net income of $36.6 million on sales of $394.0 million. For the comparable period of 2000, net income had been $34.9 million on sales of $397.1 million.
The skinny: Catalog sales increased 4%, to $68.2 million from $65.8 million; alas, comparable store sales fell 8%.
Jos. A. Bank Sees Improvement on Both Sides of the Ledger…
The third quarter proved to be a good fit for men’s apparel cataloger/retailer Jos. A. Bank Clothiers. For the three months ended Nov. 3, the Hampstead, MD-based marketer reported net income of $1.3 million — more than triple the $407,000 it earned for the comparable period of 2000. At the same time, net sales rose 14%, to $50.2 million from $44.0 million.
The skinny: For the quarter, combined catalog and Internet sales rose 18%. Online sales are increasing as Jos. A. Bank continues to migrate customers to the Web from the catalog. The company reduced its catalog circulation, which it says enabled both its catalog and its Internet businesses to be profitable for the quarter.
…While Brookstone Suffers Both Top- and Bottom-Line Declines
Nashua, NH-based gadgets and gifts cataloger/retailer Brookstone, which mails The Brookstone Collection, Hard-to-Find Tools, and Gardeners Eden catalogs, reported a net loss of $9.0 million for the quarter ended Nov. 3, compared with a net loss of $4.9 million for the comparable period of last year. At the same time, third-quarter net sales decreased 8%, to $58.5 million from $63.8 million a year earlier. Same-store sales for the quarter decreased 17%.
The skinny: Michael Anthony, chairman/president/CEO of the Nashua, NH-based company, said in a statement that since the terrorist attacks, “sales have been below targeted levels and have had a negative impact on earnings.”
| REVENUE $000 | NET INCOME $000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 12 Months Prior |
Current Quarter |
Improvement (Decline) |
12 Months Prior |
Current Quarter |
Improvement (Decline) |
Info as of Quarter Ended |
P/E (as of 12/12/01) |
||
| CONSUMER CATALOGS | Blair Corp. | 115,183 | 123,019 | 7% | (773) | (3,314) | (329%) | 9/30/01 | 19.68 |
| Coldwater Creek | 86,309 | 92,848 | 8% | 1,807 | 1,296 | (28%) | 9/1/01 | 19.81 | |
| Concepts Direct | 11,391 | 11,248 | (1%) | (2,838) | (856) | 70% | 9/30/01 | N/A | |
| Delia’s | 52,332 | 32,503 | (38%) | (42,671) | (3,151) | NM | 11/3/01 | N/A | |
| Geerlings & Wade | 7,252 | 6,901 | (5%) | (210) | (293) | (40%) | 9/30/01 | N/A | |
| Hanover Direct | 140,381 | 117,431 | (16%) | (14,799) | (6,806) | 54% | 9/29/01 | N/A | |
| J. Jill Group | 57,852 | 65,808 | 14% | 3,486 | 2,755 | (21%) | 9/29/01 | 16.22 | |
| Lands’ End | 362,261 | 376,115 | 4% | 4,443 | 12,140 | 173% | 10/26/01 | 25.1 | |
| Lillian Vernon Corp. | 45,824 | 36,828 | (20%) | (1,570) | (3,428) | (118%) | 8/25/01 | N/A | |
| Spiegel | 807,544 | 703,752 | (13%) | 13,471 | (12,305) | NM | 9/29/01 | 13.89 | |
| Successories | 13,098 | 9,882 | (25%) | 332 | (1,771) | NM | 11/3/01 | N/A | |
| CATALOGER/RETAILERS | Brookstone | 63,817 | 58,522 | (8%) | (4,889) | (8,987) | (84%) | 11/3/01 | 12.78 |
| J.C. Penney Co. | 7,538,000 | 7,729,000 | 3% | (30,000) | 31,000 | NM | 10/27/01 | N/A | |
| Jos. A. Bank Clothiers | 43,992 | 50,243 | 14% | 407 | 1,316 | 223% | 11/3/01 | 9.34 | |
| Sharper Image | 101,085 | 77,004 | (24%) | 3,105 | (3,815) | NM | 10/31/01 | 77.41 | |
| The Talbots | 397,144 | 393,966 | (1%) | 34,909 | 36,558 | 5% | 11/3/01 | 16.48 | |
| Williams-Sonoma | 424,572 | 462,096 | 9% | 2,340 | 3,853 | 65% | 10/28/01 | 44.32 | |
| MARKET INDICES | Dow Jones Industrial Average | 27.09 | |||||||
| Standard & Poor’s 500 Index | 39.37 | ||||||||
| Notes: Price-to-earnings ratios are from various sources NM = not meaningful NA = not available Source: Ulin & Holland |
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