Blair reports Q3 sales drop, net loss
Blair Corporation said net sales for the third quarter ended Sept. 30 decreased 8.6 percent for a total of $89.5 million.
The Warren, PA-based multichannel direct marketer of women's and men's apparel also reported a net loss of $1.1 million, or $0.30 per basic and diluted share, during the same period compared to net income of $1.4 million, or $0.23 per basic and diluted share reported for the third quarter of 2005.
The company said third quarter 2006 results show a 2 percent increase in cost of goods sold as a percentage of net sales over third quarter 2005 levels. This was a result of a first quarter postal rate increase and the loss of a key freight consolidator, who filed bankruptcy, causing ongoing higher outbound freight expenses.
For the nine months ended Sept. 30, net sales decreased 5.9 percent for a total of $307.2 million. However, the number of units sold rose by approximately 2.2 percent, which was offset by lower average selling prices of approximately 6.8 percent as a result of a continued price-point repositioning.
The company reported a net loss for the nine-month period of $5.7 million, or $1.47 per basic share, compared to net income of $8.1 million, or $1.09 per basic share and $1.07 per diluted share reported for the first nine months of 2005.
Blair's e-commerce channel generated $20.2 million and $73.8 million in net sales for the third quarter and first nine months of 2006 respectively, compared to $18.2 million and $64.2 million for the third quarter and first nine months of 2005.
During the third quarter of 2006, Web site traffic increased 19 percent over third quarter 2005 levels, while conversion rates and average order values remained steady. Revenue resulting from investments in keyword searches rose 62 percent, and revenue from natural search has nearly doubled following an intensive Web site optimization project.
Blair reported that it has put in place initiatives to improve site functionality and increase conversion rates this year and, during the quarter, it installed a Web analytics package that will provide more detailed insight into Web customer behavior.