Coldwater Creek Posts Another Strong Quarter

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Coldwater Creek yesterday reported fiscal second-quarter net income skyrocketed 109 percent to $7 million on sales of $154.6 million, up 39 percent.


Dennis Pence, chairman/CEO of the Sandpoint, ID-based apparel retailer, attributed part of the company's growth in the second quarter to a strategic shift toward having catalogs act as the company's primary advertising vehicle, which "has been effective in driving traffic to all three selling channels," he said in a statement.


Net sales in Coldwater Creek's direct segment increased 19 percent for a total of $59.4 million in the second quarter. The direct segment represented 38.4 percent of the company's total net sales during the period compared with 44.9 percent last year.


"The success of our e-mail marketing campaigns continues to support the growth of our Internet channel, which represented nearly two-thirds of our direct segment net sales for the quarter," Pence said.


"We see further opportunity to expand this important part of the business as we build on our growing list of 2.5 million e-mail addresses," he said.


E-commerce sales increased 49 percent for a total of $38.8 million in the second quarter. E-commerce sales represented 65.3 percent of the direct segment's net sales during the period compared with 52 percent last year. They represented 25.1 percent of the company's total net sales during the second quarter compared with 23.3 percent last year.


Catalog net sales decreased 14 percent for a total of $20.6 million in the second quarter. Catalog net sales represented 34.7 of the direct segment's net sales and 13.3 percent of total net sales. This compares with last year's figures of 48 percent and 21.6 percent, respectively.


For the six-month period ended July 30, Coldwater Creek's net sales totaled $310.2 million, a 32 percent gain over last year. Also, net income rose 79 percent for a total of $15.5 million or $0.25 per diluted share.


In the direct segment, net sales increased 11 percent for a total of $131.2 million in the first six months. Direct segment net sales represented 42.3 percent of the company's total net sales in the first half compared with 50 percent last year.


Internet net sales increased 31 percent to $79.8 million in the first six months. Internet net sales represented 60.8 percent of the direct segment's sales during the first half compared with 51.6 percent last year. Internet net sales represented 25.7 percent of the company's total net sales in the first six months compared with 25.8 percent last year.


Catalog net sales decreased 10 percent for a total of $51.4 million in the first six months. Catalog net sales represented 39.2 percent of the direct segment's net sales in the first half compared with 48.4 percent in the same period last year.


Also, catalog net sales represented 16.6 percent of the company's total net sales in the first six months of fiscal 2005 compared with 24.2 percent in the comparable period last year.


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