Merchants report Q3 woes
That the third quarter was tough for multichannel merchants was again apparent Nov. 16 as another round of results were released. However, growth in Internet sales provided a bright spot for a couple of retailers.
Sears Holdings Corp. reported revenues declined $300 million for a total of $11.9 billion for the 13 weeks ended Oct. 28, with revenues at Sears declining $100 million and revenues at Kmart dropping $200 million.
Comparable-store sales decreased 3 percent in the aggregate, with Sears Domestic same-store sales declining 4.8 percent and Kmart same-store sales declining 0.7 percent.
The Hoffman Estates, IL, retailer also said its net income for the third quarter totaled $196 million, or $1.27 per diluted share compared with net income of $58 million, or $0.35 per diluted share, for the same period last year.
Williams-Sonoma Inc., San Francisco, said net revenues for the third quarter of fiscal year 2006, the period ended Oct. 29, increased 3 percent for a total of $852.8 million. Same-store sales were flat during the same period.
"Our revenue growth of 3 percent was slightly below our expectations due to further softening in the Pottery Barn brand, and increasing volatility of our other home furnishings brands," Howard Lester, chairman/CEO of Williams-Sonoma, said in a statement.
"As both of these trends have continued into the fourth quarter, we are increasingly concerned about the 'home-related' macro-economic environment, as well as the competitive landscape - which is becoming highly promotional," he said.
The company's direct-to-consumer net revenues decreased 0.3 percent for a total of $381.9 million. This decrease was primarily driven by lost revenues in the Hold Everything brand - shut down earlier this year - and a reduction in year-over-year revenues in the Pottery Barn brand. Internet revenues increased 15.1 percent for a total of $227.3 million.
The company estimates that approximately 45 percent of its company-wide non-gift registry Internet revenues are incremental to the direct-to-consumer customer channel. It also estimates approximately 55 percent of these purchases are made by customers who recently received a catalog.
Williams-Sonoma's net earnings for the third fiscal quarter decreased 21.4 percent to $29.1 million, or 25 cents per diluted share, versus $37.1 million, or 31 cents per diluted share, last year.
The Bombay Company Inc., Fort Worth, TX, saw its revenue drop 15.5 percent for the three months ended Oct. 28 for a total of $108.2 million. Same-store sales declined 15.5 percent during the same period.
Bombay's direct-to-consumer business grew to $7.4 million for the quarter compared to $5.5 million last year, driven primarily by Internet sales.
The company's net loss for the quarter totaled $15.6 million, or 43 cents per share, compared to a net loss of $4.4 million, or 12 cents per share, last year.
Limited Brands, Columbus, OH, reported net sales for the third quarter ended Oct. 28 totaled $2.1 billion compared to $1.9 billion last year. Comparable-store sales for the quarter increased 10 percent.
The company's net income totaled $23.5 million and earnings per share increased to 6 cents for the third quarter compared to no gain or loss last year.