Net Income Down at IAC/InterActiveCorp
Third-quarter net income at New York-based IAC/InterActiveCorp. (NYSE: IACI) slid 24%, to $68.1 million, due largely to a non-cash compensation charge of $67 million related to the spin-off of its Expedia travel division. But overall revenue for the quarter climbed 55%, to $1.48 billion. The company’s April acquisition of multititle mailer Cornerstone Brands accounted for much of the increase.
Cornerstone, whose catalogs include Frontgate, Ballard Design, Garnet Hill, and The Territory Ahead, is not part of IAC’s HSN unit. Cornerstone’s year-over-year sales grew “at a double-digit rate,” according to a release. IAC’s U.S. retailing revenue for the quarter, which includes sales from HSN.com and the HSN television network, rose 52%, to $664.3 million. The Internet accounted for about 23% of that revenue. Operating income for the U.S. retailing division rose a more modest 31%, to $56.7 million, “due to the inclusion of Cornerstone Brands (catalogs have relatively higher operating expenses) and lower gross profit margins at HSN resulting primarily from increased clearance sales and markdowns.”
The company also noted that “the integration of Cornerstone Brands is under way with a number of products now being tested on HSN and HSN.com in anticipation of increased cross-selling in 2006.”
IAC’s other businesses include LendingTree, Ticketmaster, and Ask Jeeves.
Sales, Earnings Up at Sportsman’s Guide
South St. Paul, MN-based The Sportsman’s Guide (Nasdaq: SGDE) increased its third-quarter net sales 8%, to $61.5 million for the three months ended Sept. 30. The company enjoyed especially strong growth within its Golf Warehouse division.
Third-quarter net earnings for the company, whose core brand sells outdoor sporting gear, rose 50%, to $2.2 million from $1.4 million last year. Internet-related sales totaled nearly 60% of direct revenue for the quarter.
RedEnvelope Cuts Its Losses
San Francisco-based gifts merchant RedEnvelope (Nasdaq: REDE) reported a net loss of $3.5 million for the quarter ended Oct. 2, down from $3.9 million for the comparable quarter of last year. The company credits fulfillment efficiencies for its narrower loss. Fulfillment expenses totaled 17% of net revenue, compared with 21.7% of net revenue a year ago.
Net revenue jumped 24%, to $13.1 million from $10.6 million. Online sales grew faster than RedEnvelope’s catalog sales, exceeding expectations. Because the catalog performed below expectations for the quarter, RedEnvelope is tinkering with its circulation, design, and product assortment to boost growth.