November 4, 2004, 12:00 AM

Sharper Image’s web sales grow 24% while total sales are up 20%

Sharper Image’s Internet-based sales increased 24% in the third quarter over Q3 2003, reaching $21 million from $17 million. Total sales in the quarter increased 20% to $150 million from $124.9 million. The web accounted for 14% of all sales.

Sharper Image Corp.’s Internet-based sales increased 24% in the third quarter over Q3 2003, reaching $21 million from $17 million, the company reports. Total sales in the quarter increased 20% to $150 million from $124.9 million. Internet sales accounted for 14% of sales in the quarter, up from 13.6% a year ago. Store sales were up 15% to $80.1 million, while comparable store sales were down 1%. Catalog/direct marketing sales including wholesale were up 28% over Q3 last year.

For the first nine months of the year, Internet sales were up 32% to $67.7 million from $51.5 million, while total sales rose 25% to $448.1 million from $359.9 million. Web sales made up 15.1% of all sales vs. 14.3% a year ago. Total store sales were up 19% and comparable store sales were up 3%. Catalog/direct marketing sales, including wholesale, increased 32%.

In October, Internet sales were up 21% to $8.3 million from $6.9 million in October 2003, while total sales were up 22% to $60.3 million from $49.3 million. Total store sales were up 16% while comparable store sales were down 1%. Catalog/direct marketing sales, including wholesale, were up 32%.

"The total company October sales were good, but at the low end of our expectations, due in part to the less-than-desired inventory levels caused by slow processing of merchandise going through the West Coast ports," said Richard Thalheimer, founder, chairman and CEO. "Additionally, our merchandise gross margin was lower than planned because of a variety of factors including markdowns of seasonal merchandise; increased promotions and sales incentives; and higher air freight expense incurred to by-pass the West Coast port slowdown. We also committed additional advertising to the launch of our Professional Series Ionic Breeze Silent Air Purifiers."

The company says it is updating its expectations for the third quarter to a net loss of 19-23 cents per share vs. earnings of 6 cents a share in Q3 last year. “This guidance is based on decreased realized gross margin rate and slightly lower than anticipated sales for the quarter," Thalheimer said.

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