Catalog sales down 6% at PC Mall
Torrance, CA-based computer reseller PC Mall (Nasdaq: MALL) posted a 19% increase in total second-quarter sales, to $205.0 million for the three months ended June 30. That’s especially gratifying, considering that historically the second quarter is the weakest for the marketer. Recently acquired Pacific Business Systems accounted for 8% of the consolidated sales growth.
However, catalog sales dropped 6% for the quarter. And net income declined to $456,000 from $585,000 last year.
Direct segment off at Martha Stewart As if Martha Stewart didn’t have enough to contend with, catalog and Internet sales at her media conglomerate, Martha Stewart Living Omnimedia (NYSE: MSO), fell 27% during the second quarter. Reduced catalog circulation accounted for much of the decline, however. For the three months ended June 30, sales from the direct division, which includes the Martha by Mail catalog, were $8.1 million, down from $11.1 million a year earlier. What’s more, the division’s EBITDA loss widened 16%, to $6.7 million for the quarter from a loss of $5.8 million a year ago, reflecting lower-margin revenue associated with inventory clearance sales, and higher fulfillment costs associated with the transition to a new call and fulfillment center.
Other divisions of the New York-based company, such as the publishing and television sectors, performed well and posted gains. Total revenue for the quarter was $78.6 million, up 16% from $67.8 million for the second quarter of 2001. EBITDA increased 38%, to $16.2 million from $11.8 million last year.
In a statement, chief financial officer James Follo admitted that the ImClone probe has hurt the business. Federal investigators are questioning whether Stewart had inside information when she sold nearly 4,000 shares of ImClone Systems on Dec. 27, the day before the company disclosed that the Food and Drug Administration had refused to review the drug application for its cancer drug.
“Looking forward,” Follo said, “we have begun to see some impact on our business resulting from the uncertainty relating to the investigations of Martha Stewart’s stock sale.”