Sharper Image Turns Dull in August

Share this content:
The August heat melted the share price of Sharper Image Corp., San Francisco. Investors holding the multichannel marketer's stock saw its value plummet 34.6 percent from July 27 to Aug. 31, falling from $27.46 to $17.95, while at least two analysts downgraded the stock.


The bad news started early in the month when Sharper Image announced July sales numbers. Though the company reported double-digit increases in total company sales, total store sales, catalog/direct marketing sales and Internet sales for July, the second quarter and first six months, it lowered its earnings guidance because of lower-than-expected sales for the second quarter.


Based on preliminary second-quarter results, the company said "it is also prudent" to lower full-year earnings-per-share guidance to $1.83 to $1.87 per diluted share, down from prior guidance of $2 to $2.04.


That announcement caused Sharper Image's stock price to drop to $19.43 Aug. 5 from the previous day's close of $25.49.


"While our July sales increases come on top of excellent increases in the prior year, they were below our expectations," said Richard Thalheimer, company founder/chairman/CEO. "We believe that increased travel, good summer weather and competition generally from election-related media spending contributed to this lower return on our advertising expenditures."


The company offered more good news/bad news last week with its August sales. Though it again reported double-digit increases in total company sales, total store sales, catalog/DM sales and Internet sales, it posted a comparable-store sales decrease of 6 percent. In afternoon trading Sept. 2, the stock stood at $17.72.


According to CBS MarketWatch, Kristine Koerber of W.R. Hambrecht lowered her rating on the stock to "sell" from "hold," while J.P. Morgan's Brian Tunick dropped his rating from overweight to neutral.


"Clearly, we believe there are more questions than answers, and we do not think that the company even has a full grasp on what is suddenly ailing its business," Tunick was quoted as saying in a note to investors.


Koerber was quoted as saying in her note that Sharper Image's shares will continue to slide until positive comps emerge, something not anticipated this year.


"Comp trends are down sharply," she wrote. "The slowdown in business is the result of lack of new product, lower infomercial spending, lackluster customer response to catalog mailings, macroeconomic factors and customer distraction possibly [because of] the Olympics and presidential election."


In other news, Pitney Bowes completed its acquisition of Group 1 Software (GSOF), and its stock was delisted. JoS. A. Bank Clothiers Inc. had a 5-for-4 stock split. Cabela's was added to replace Media Services Group Inc., which no longer does any direct marketing business.


close

Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above