Spiegel Group Loses $12.3M for 3Q
"Earnings were in line with guidance provided in early September, despite the business impact of the tragic events on Sept. 11," James R. Cannataro, executive vice president and chief financial officer of The Spiegel Group, Downers Grove, IL, said in a statement. "Consumer spending has clearly been affected by these events, adding further stress to an already uncertain retail environment. Our third-quarter results reflect sales weakness in each of our merchant companies as well as higher charge-offs in our credit operations.
"In planning holiday-season demand, we took a conservative approach in our inventory commitments," he said.
Total revenue for the quarter declined 13 percent to $703.8 million, with an 11 percent drop in net sales and a 37 percent decrease in finance revenue.
Net sales included a 13 percent decline in direct sales and a 7 percent drop in retail store sales. E-commerce sales continued to outpace the overall sales trend, recording a 42 percent increase, offset by a 22 percent drop in catalog sales. The decline in retail store sales includes a 15 percent decrease in Eddie Bauer's comparable-store sales, offset somewhat by sales growth in its outlet stores.
The gross profit margin as a percentage of net sales fell to 34.2 percent for the quarter from 36 percent for last year's third quarter, primarily due to higher markdowns and additional marketing promotions at the company's Eddie Bauer division.