Brookstone Q4 Net Falls 29.2%; Loss Widens for Fiscal Year
Posted on March 28, 2013 by
MERRIMACK, N.H.-In what the company described as a disappointing end to its fiscal year, Brookstone's fourth-quarter net income dropped 29.2 percent to $27.8 million. For its fiscal year ending on Dec. 29, the retailer/product-development company's net loss increased from $7.3 million to $13.7 million.
The quarterly results stemmed from a decrease of 8 percent in net sales, which totaled $232.8 million. Most of the decline occurred in Brookstone's retail channel, whose sales fell back 8.7 percent, including a 6.3 percent drop in same-store sales. Sales in its e-commerce channel were down 2.1 percent, while sales in its alternative distribution channel (which encompasses its wholesale business) rose 24.3 percent.
The overall sales decrease was a factor in Brookstone's 284 basis-point plummet in gross margin, which finished the quarter at 37.4 percent. Selling, general and administrative expenses fell 4.5 percent but increased 84 basis points as a percentage of sales, to 23.1 percent.
For the fiscal year, net sales rose 4.6 percent to $519.6 million. Retail-channel sales slipped 0.1 percent, including an increase of 1.7 percent in same-store sales. Sales in Brookstone's e-commerce channel were up 9.3 percent, and sales in the alternative-distribution channel jumped 51.4 percent.
Despite the weak end to the fiscal year, Stephen Bebis, Brookstone's president and CEO, cited the growth in the e-commerce and alternative-distribution businesses as positives for the company. Bebis added that Brookstone has launched a plan "to significantly reduce certain administrative and labor costs....These measures are designed to increase the profitability of the company, while at the same time provide for growth of our strategic initiatives."