Some Slight Gains

Nov 01, 2009 10:30 PM  By

THE SECOND QUARTER COULD HAVE BEEN WORSE but it still wasn’t pretty for most of the publicly traded consumer merchants tracked by Multichannel Merchant. Five out of the eight posted declines from the previous quarter.

On the bright side, a few companies did see some scant increases. Sales at Delia’s were up 2%, while Gaiam saw a 6% revenue gain. And Jos. A. Bank made it into the double digits with a 10% rise in sales.

But such increases are hard to pull off in this economy, says Stuart Rose, managing director for Tully & Holland, the Wellesley, MA-based investment bank that tracks marketers for Multichannel Merchant.

“Consumers continue to stay out of the marketplace, which is driving the decline in revenue, while businesses struggle to cut costs to keep pace with declining revenue,” Rose says.

Sunnier second quarter for Gaiam

Quarter ended: June 30: The facts: Second-quarter revenue for healthy living products merchant Gaiam increased 6%, to $60.5 million, from $57.2 million recorded in the same period last year. Selling and operating expenses decreased $3 million, or 9%, to $30.7 million during the second quarter of 2009, from $33.7 million during the same quarter last year. This decrease reflects reduced payroll costs, optimizing its direct business through reduced catalog prospecting and closing non-profitable businesses. The skinny: Gaiam’s increase in sales was due primarily to the solar business, coupled with an improvement in its trade domestic business. It was a nice rebound for the manufacturer/marketer of healthy living products after a 14% sales decline in the first quarter.

Sales and profits slide at Sonoma

Quarter ended: Aug. 2 The facts: Williams-Sonoma reported $399,000 in net income during the quarter. That’s a serious tumble from the $18.4 million in net income the cataloger/retailer earned during the second quarter of 2008. The kitchen and home goods company’s net revenue fell 18%, from $819.6 million to $672.1 million, during the same period. Net profit margin declined 210 basis points, from 2.2% in the quarter in 2008 to 0.1% over the same period in 2009. The skinny: Although Williams-Sonoma’s second quarter was woeful, its third quarter at press time was showing significant progress. Sharon McCollam, the company’s chief financial officer, said last month at a conference that sales response rates to its fall catalogs have been “substantially better than expected.”

Bank is the quarter’s bright spot

Quarter ended: Aug. 1 The facts: Men’s apparel cataloger/retailer Jos. A. Bank Clothiers posted another solid quarter, with gains in both the top and bottom lines. Revenue rose 9.8%, to $167.7 million, up from $152.7 million for the period in 2008. The company’s direct sales decreased 6.7% for the quarter. But net income soared 41%, to $12.5 million, up from $8.9 million for the same quarter last year. Same-store sales increased 6.2%. Sales growth can be attributed to a rise in store sales of 11.7% during the period, driven by increases in dollars spent per transaction as well as an increase in the volume of transactions, Rose explains. The skinny: While operating costs increased slightly, Rose says, Bank increased efficiency by putting the brakes on store openings.

REVENUE NET INCOME (LOSS)
Company 12 months prior Current quarter Increase (decrease) 12 months prior Current quarter Increase (decrease)
($000) ($000)
1-800-Flowers.com 186,944 172,462 (8%) 4,298 (22,223) NM
Coldwater Creek 241,434 225,192 (7%) 3,140 (4,922) NM
Delia’s 44,643 45,732 2% (4,983) (4,658) NM
Gaiam 57,217 60,475 6% 2,581 (1,009) NM
J.C. Penney Co. 4,282,000 3,943,000 (8%) 117,000 (1,000) NM
Jos. A. Bank 152,734 167,735 10% 8,869 12,512 41%
Talbots 395,209 304,641 (23%) (25,008) (24,485) NM
Williams-Sonoma 819,621 672,114 (18%) 18,384 399 (98%)
Source: Tully & Holland