Blair's Q1 Net Income Drops Despite Small Sales Increase
Net income totaled $500,189 compared to $5.6 million posted in the first quarter last year. The reduction in net income was primarily attributable to increased cost of goods sold and advertising expenses, the company said.
Cost of goods sold as a percentage of net sales increased to 49.5 percent from 47.7 percent in the comparable quarter last year. The rise in cost of goods sold reflected an increase in sales from promotional activities, higher inbound air freight expenses and a greater mix of outbound packages in excess of one pound that increased shipping costs.
Advertising expenses increased 13 percent due to an increase in catalog and letter mailings to current and prospective customers.
Blair's e-commerce channel generated $16 million in gross sales demand in the first quarter of 2003 compared to $13 million in 2002.
In other news:
· Guitar Center Inc., Westlake Village, CA, said net sales in the first quarter increased 13 percent to $287.5 million compared to $254.8 million during the first quarter of 2002. Net income skyrocketed 53 percent to $5.3 million compared to $3.4 million in the first quarter last year. Net sales in the direct response division increased 21.5 percent to $59.9 million. Gross margin for the division was 31.3 percent compared to 27.7 percent a year ago, with the increase attributed primarily to a shift in product mix toward higher margin items.