Brookstone (NASDAQ:BKST)
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Brookstone Q1 Earnings Improve 27.6 Percent on Strong Sales
Increases
NASHUA, N.H., May 19 /PRNewswire-FirstCall/ -- Specialty retailer Brookstone,
Inc. , propelled by strong double-digit same-store sales from customer demand
for its innovative products, announced today that earnings for the first
quarter improved 27.6 percent over first-quarter results in 2003.
Same-store sales for the 13-week period ended May 1, 2004, soared 20.1 percent,
while total sales for the quarter rose 27.1 percent to $77.5 million, compared
to $61.0 million for the first quarter of 2003. Direct Marketing sales climbed
16.4 percent to $11.8 million.
For the first quarter, Brookstone narrowed its net loss to $4.6 million, or
$0.23 per diluted share, a 27.6 percent improvement over the loss of $6.4
million, or $0.33 per diluted share in the first quarter of 2003.
Because of the seasonal nature of specialty retailing, Brookstone generally
carries a loss through the first three quarters and makes its profit in the
fourth quarter.
"We are extremely pleased with our strong first-quarter results and believe
they reflect the growing customer demand for our high-value, differentiated
products," said Brookstone Chairman, President and Chief Executive Officer
Michael Anthony. "We continue to benefit from our unique position in the
marketplace as both a product developer and multi-channel retailer, which
allows us to operate outside the influence of big-box retailers that sell
undifferentiated products and compete largely on price."
Mr. Anthony continued: "As a result, in the first quarter of 2004 we
experienced very strong sales of Brookstone products across a wide variety of
categories, as well as increased margins over the first quarter of 2003. We
are particularly pleased with our 20.1 percent increase in same-store sales,
which we attribute to our strong product selection and the broadening appeal of
the Brookstone brand. Additionally, our airport stores turned in an impressive
performance in the first quarter by generating same-store sales above the
Company average."
Looking ahead to the second quarter and beyond, Mr. Anthony said, "We expect to
turn in another successful Father's Day and to narrow our second- quarter loss
by approximately 50 percent to between $0.04 and $0.06 per diluted share,
compared to our loss of $0.12 per diluted share in the second quarter of 2003.
For the second quarter, we anticipate same-store sales will be in the
high-single digits."
"For the year, we remain on track to open approximately 20 new stores and
remodel 10 to 13 stores, all in our successful and award-winning new store
design that we're rolling out nationally and that continues to generate same-
store sales results well above our Company average."
Mr. Anthony concluded: "Given the strength of our business in the first
quarter, our merchandise selection and our full product pipeline, we believe we
will generate sales and earnings that will lead our Company to another year of
record profitability. For the year, Brookstone reaffirms its recently raised
earnings guidance of between $1.07 and $1.10 per diluted share, an improvement
of approximately 25 percent over the $0.87 per diluted share the Company earned
in 2003."
Brookstone, Inc. is a specialty retailer that operates 274 Brookstone Brand
stores nationwide and in Puerto Rico. Typically located in high-traffic
regional shopping malls and airports, the stores feature unique and innovative
consumer products. The Company also operates three stores under the Gardeners
Eden Brand, and a direct marketing business that consists of three catalogs
titles -- Brookstone, Hard-to-Find Tools and Gardeners Eden -- as well as
e-commerce web sites at http://www.brookstone.com/ and
http://www.gardenerseden.com/.
Statements made available on this conference call and web cast which are not
historical facts, including statements about the Company's confidence or
expectations, earnings, anticipated operations of its e-commerce sites and
those of third-party service providers, and other statements about the
Company's operational outlook, are forward-looking statements subject to risks
and uncertainties that could cause actual results to differ materially from
those set forth in such forward-looking statements. Such risks and
uncertainties include, without limitation, risks of changing market conditions
in the overall economy and the retail industry, consumer demand, the
effectiveness of e-commerce technology and marketing efforts, availability of
products, availability of adequate transportation of such products, and other
factors detailed from time to time in the Company's annual and other reports
filed with the Securities and Exchange Commission. Words such as "estimate",
"project", "plan", "believe", "feel", "anticipate", "assume", "may", "will",
"should" and similar words and phrases may identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date thereof. The Company undertakes no
obligations to publicly release any revisions to these forward-looking
statements or reflect events or circumstances after the date hereof.
CONTACT: Philip Roizin
EVP of Finance and
Administration
(603) 880-9500
Robert Fusco
Investor Relations
(603) 880-9500
Brookstone, Inc.
Consolidated Statement of Operations
($ in thousands)
(Unaudited)
Thirteen Weeks Ended
May 1, 2004 May 3, 2003
Net sales $77,451 $60,957
Cost of sales 54,364 46,166
Gross profit 23,087 14,791
Selling, general and administrative expenses 30,240 25,085
Loss from operations (7,153) (10,294)
Interest expense, net 236 131
Loss before taxes and other party interests in
consolidated entities (7,389) (10,425)
Income tax benefit (2,845) (4,014)
Loss before other party interests in
consolidated entities (4,544) (6,411)
Other party interests in consolidated entities,
net of tax of $62 100 ---
Net loss $(4,644) $(6,411)
Net loss per share - basic/diluted $(0.23) $(0.33)
Weighted average shares outstanding
basic/diluted 20,020 19,213
Brookstone, Inc.
Condensed Consolidated Balance Sheet
($ in thousands)
Unaudited
May 1, 2004 May 3, 2003 January 31, 2004
Current Assets:
Cash and cash equivalents $ 37,409 $ 30,329 $ 69,738
Receivables, net 7,505 6,922 7,476
Merchandise inventories 69,978 59,871 66,876
Deferred income taxes 7,778 8,274 4,799
Other current assets 7,485 6,137 6,217
Total current assets 130,155 111,533 155,106
Deferred income taxes 4,738 5,854 4,738
Property and equipment, net 58,058 39,851 53,970
Intangible assets, net 4,056 4,326 4,123
Other assets 4,237 3,753 2,390
Total assets $201,244 $165,317 $220,327
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $15,249 $11,345 $15,759
Other current liabilities 27,119 23,031 41,827
Total current liabilities 42,368 34,376 57,586
Other long term liabilities 16,214 13,943 15,676
Long term obligation under
capital lease 1,975 2,069 1,941
Commitments and Contingencies
Total shareholders' equity 140,687 114,929 145,124
Total liabilities and
shareholders' equity $201,244 $165,317 $220,327
DATASOURCE: Brookstone, Inc.
CONTACT: Philip Roizin, EVP of Finance and Administration, +1-603-880-
9500, or Robert Fusco, Investor Relations, +1-603-880-9500 both of Brookstone,
Inc
Web site: http://www.brookstone.com/