NEW YORK — Coldwater Creek Inc. doubled its first-quarter income despite flat sales as the multichannel women’s apparel and accessories specialty retailer reduced marketing and other costs as well as merchandise returns.
For the three months ended June 1, the Sandpoint, Idaho-based firm posted income of $2.8 million, or 26 cents a diluted share, compared with income of $1.4 million, or 13 cents, in the year-ago period. Sales fell to $112 million from $112.9 million.
“I am pleased with the effectiveness of the cost-control program steps we took last year,” Georgia Shonk-Simmons, president and chief executive officer, said in an afternoon conference call. “We kept [catalog] circulation tight and I believe it was a sound decision based on the economic conditions and its positive effect on earnings.”
She noted that there is a potential for increased catalog circulation in the second half of the year.
To be less reliant on high-cost catalogs, Coldwater has diversified with more retail stores and its Web site and should over time see continued earnings growth. The retailer opened five new stores in the quarter, for a total of 36. The company said its goal is to have 43 stores open in time for holiday 2002.
Sales from its retail group improved 158.2 percent to $23.5 million for the first quarter from $9.1 million and represented 21 percent of Coldwater’s total sales, versus 8.1 percent last year. However, sales from the direct segment, which includes its catalog, e-commerce and outlet store businesses, decreased 14.6 percent to $88.5 million from $103.7 million due to the drop in catalog circulation. The direct group sales comprised 79 percent of the retailer’s total business, down from 91.9 percent.
“As a percentage of total net sales, we have successfully shifted more of our overall business to the Internet and retail stores, in keeping with our integrated triple-channel retailing strategy,” Shonk-Simmons said in a statement.”