Blair Sinks to Loss in Q3
NEW YORK – A shift to lower-priced merchandise and the loss of credit revenues combined for lower sales and a net loss in Blair Corp.’s third quarter.
For the three months ended Sept. 30, the Warren, Pa.-based direct marketer of apparel and home goods incurred a net loss of $1.1 million, or 30 cents a diluted share, versus net income of $1.4 million, or 23 cents, in the year-ago period. Without the credit portfolio, sold to a third-party provider last November, Blair said it would have had a net loss of $819,000, or 14 cents a share, during the third quarter of fiscal 2005.
Net sales were $89.5 million, 8.7% lower than the $98.1 million registered during last year’s quarter. Decreases in average selling prices were responsible for $5.9 million of the $8.6 million reduction. E-commerce sales rose to $20.2 million from $18.2 million a year ago as Web site traffic increased 19%. Revenue attributable to keyword searches rose 62%.
The company was insulated against greater losses by a $7.9 million reduction in general and administrative expenses and an $811,000 cut in interest expense. However, advertising costs as a percentage of net sales were up 3%.
“We are addressing the challenging times within the retail catalog market by continuing to implement initiatives geared to promoting the customer’s buying experience, improving product demand and increasing our operational efficiencies,” said John E. Zawacki, president and chief executive officer of Blair. “As a result of ongoing strategic efforts, we continue to recognize growth in the area of e-commerce.
“We are dedicated to reinforcing our position as the premier direct marketer to value-conscious consumers and increasing long-term shareholder value,” he noted.
For the nine months, Blair’s loss hit $5.7 million, or $1.47 a share, against net income of $8.1 million, or $1.07 per diluted share. Without credit activity in 2005, year-ago profits would have totaled $1.7 million. Net sales for the nine months were off 5.9% to $307.2 million as unit sales were up 2.2% but average selling prices declined 6.8%.
The company has repurchased 157,500 shares of its stock under a previously approved buyback plan and is authorized to repurchase an additional 242,500 shares. Its revolving credit agreement allows for annual repurchases of up to $5 million.
