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Sharper Image reports third quarter results.

SAN FRANCISCO--(BUSINESS WIRE)--Nov. 26, 1996--Sharper Image Corp. (NASDAQ:SHRP) today reported total revenues for the third quarter ended Oct. 31, 1996, of $39.4 million, a five percent decrease from total revenues of $41.3 million for the same quarter in 1995.

Comparable store sales were $24.5 million, compared to $27.7 million of the same prior-year quarter, a 12 percent decrease. The net loss for the quarter was $1.7 million, or 20 cents per share, compared to a net loss of $835,000, or 10 cents per share for the year-ago quarter.

For the nine months of fiscal 1996, total revenues were $120.1 million, four percent lower than the $124.8 million for the same year-earlier period. Comparable store sales decreased seven percent to $76.9 million from $82.7 million for the same nine-month period in 1995. Net loss for the current year nine-month period was $4.9 million, or 60 cents per share compared to a net loss of $2.9 million, or 36 cents per share for the comparable prior-year period.

"Sales for the third quarter were affected by the lower number of catalog pages circulated during the quarter as compared with the prior year. Advertising expense was 22 percent lower than last year's same period, due primarily to fewer catalog pages as well as lower paper prices. The planned reduction in advertising had the anticipated effect of lowering sales," said Richard Thalheimer, chairman, founder, and CEO of the company.

"Inventory levels for the third quarter were lower than optimum, reflecting some of the manufacturers' delivery constraints. We believe this had an impact on sales as well. We look for improvements in this area in the fourth quarter," Thalheimer continued.

"We have seen meaningful decreases in paper prices since July as compared with the prior year. The price decreases will allow us to more aggressively prospect for new customers during the fourth quarter by reducing our catalog costs.

"In October, we launched our redesigned Sharper Image catalog. The Sharper Image catalog has a completely new and updated graphic look and copy approach. The redesigned catalog employs high-tech graphics, lifestyle photography, and humorous and stimulating copy.

"In concert with the new catalog look, we also launched a major advertising campaign in leading consumer magazines. The print ads will run again in November and December. This $2 million print advertising campaign was designed to open the shopping experience for a whole new generation of customers who will find our best-selling products exciting and affordable, as well as attract existing customers to our stores and catalogs.

"We continue to invest in the growth of our multiple retail concepts. Results for the current nine-month period reflect expenditures of more than $1 million invested in the development of the six Sharper Image SPA Collection stores. Four new stores were opened during the third quarter. The third test mailing of our The Sharper Image Home Collection catalog is generating results that are better than the positive responses on the first two test mailings.

"Our Internet site at, which contains the entire The Sharper Image catalog, provides a unique shopping experience on-line through the use of NEXT software Web Objects. Other on-line sales channels such as America Online continue to grow at a good pace.

"Our long-term growth strategy provides exciting opportunities, and we believe that our common stock, trading recently at about one-time book value, represents a good investment opportunity," Thalheimer concluded.

This release contains certain forward-looking statements regarding the company's expected performance for future periods, and actual results for such periods may materially differ. Such forward-looking statements involve risks and uncertainties, including risks of changing market conditions in the overall economy and the retail industry, consumer demand, the opening of new stores, actual advertising expenditures by the company, the success of the company's advertising and merchandising strategy, availability of products, and other factors detailed from time to time in the company's annual and other reports filed with the Securities and Exchange Commission.

The Sharper Image(R) creates and sells a unique assortment of original gifts and products through entertaining stores, catalogs and other marketing channels, with an extraordinary level of customer service. There are three retail concepts marketed through catalogs and more than 90 retail stores throughout the United States and internationally. -0-
 The Sharper Image
 Financial Table
 (Dollars in thousands except per share amounts)

 Three Months Ended
 Oct. 31, Oct. 31,
 1996 1995

Total revenues $ 39,368 $ 41,335

Cost of products 20,282 20,582
Buying and occupancy 6,071 5,370
Advertising and promotion 4,562 5,860
General, selling and
 administrative 11,064 10,847

Operating loss (2,611) (1,324)
Other income (expense) (184) (67)
Income tax benefit (1,118) (556)

Net loss ($1,677) ($835)

Net loss per share ($0.20) ($0.10)
Weighted average shares
outstanding 8,263,000 8,247,000

Stores open 87 80

 Nine months ended
 Oct. 31, Oct. 31,
 1996 1995

Total revenues $120,055 $124,794

Cost of products 62,400 62,361
Buying and occupancy 17,456 15,472
Advertising and promotion 15,095 20,222
General, selling and
 administrative 33,085 31,976

Operating loss (7,981) (5,237)
Other income (expense) (269) 360
Income tax benefit (3,300) (1,951)

Net loss ($4,950) ($2,926)

Net loss per share ($0.60) ($0.36)
Weighted average shares
 outstanding 8,258,000 8,243,000

 Balance Sheet Data

 Oct. 31, Oct. 31,
 1996 1995

Cash $ 573 $ 803
Inventories 36,403 38,403
Other current assets 18,402 20,212
Total current assets 55,378 59,418
Property & equipment
 and other assets 24,572 19,824
Total assets $79,950 $79,242

Current liabilities $35,933 $38,967
Other liabilities 16,177 10,855
Total liabilities 52,110 49,822

Stockholders' equity 27,840 29,420
Total liabilities and
 stockholders' equity $ 79,950 $ 79,242

CONTACT: The Sharper Image, San Francisco

Tracy Wan, 415/445-6120


The Investor Relations Company, Chicago

Gale Strenger, 847/564-5610
COPYRIGHT 1996 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Publication:Business Wire
Date:Nov 26, 1996
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