Brookstone Loss Grows in Q3
MERRIMACK, N.H.-Faltering sales and rising costs deepened the red ink on Brookstone's bottom line in its fiscal third quarter, which ended on Sept. 28.
The third-quarter net loss totaled $18.1 million, compared to last year's net loss of $12.2 million. Net sales were down 7.3 percent to $88.3 million. Net sales in its retail channel were off 7.6 percent, including a 0.7 percent decline in same-store sales.
Net sales in its alternative-distribution channel (which oversees sales to direct resellers and corporate customers) decreased 22.5 percent, the result of Brookstone's effort to increase its focus on its core wholesale customers. Net sales in Brookstone's e-commerce channel gained 13.4 percent, thanks to a larger selection of third-party products on the Brookstone website, along with the addition of new Internet marketing programs.
Gross margin in the quarter fell 134 basis points to 22 percent. Selling, general and administrative expenses rose 9.1 percent in dollars and 551 basis points as a percentage of sales, to 36.7 percent.
Jim Speltz, Brookstone's president and CEO, said the holiday season is promising for the lifestyle retailer. "We are prepared for the upcoming holiday season, our store teams are energized and we have a new and exciting Internet and catalog presentation which ties our channels together."