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Coastal Contacts’ Q1 looks like a winner with a 24% sales increase
Online vision products retailer Coastal Contacts reported sales of $31.3 million for the first quarter of fiscal 2009, an increase of 24%, or $6.2 million, compared with $25.1 million in the same period last year.
Despite downward economic pressure on many retailers, Coastal Contacts Inc. booked sales of $31.3 million for the first quarter of fiscal 2009, an increase of 24%, or $6.2 million, from $25.1 million in the same period last year.
Net income for Q1 of 2009, ended Jan. 31, 2009, was $1.0 million, compared with a loss of $690,000 in the first quarter of 2008. Coastal Contacts, a web-only vision products retailer, is No. 120 in the Internet Retailer Top 500 Guide.
CEO Roger Hardy believes economic forces are playing into Coastal Contacts’ hands. “There’s a channel shift and these economic times are forcing people to look for value. Shopping online with us offers exceptional values, from 50%-70% over other retailers’ prices,” Hardy tells Internet Retailer.
Because vision products--including contact lenses and cleaning solution and eyeglasses--are not discretionary purchases, consumers are increasingly willing to hunt for the best deals, Hardy says. For Coastal Contacts, new business leads to more business as the “annuity factor” drives more and larger orders, he says.
About 20% to 25% of the Q1 sales lift was from new business, Hardy says, and about one-third of the 24% growth was from increased order size. “We have a really strong annuity base, upwards of 70% of our business is repeat versus 60% last year,” he says. “Second-time average order sizes are coming up, because customers know us. And if the customer adds a pair of glasses, it takes the order size up further.” Coastal began manufacturing and selling eyeglasses in early 2008.
Total order volume for Q1 2009 was 299,855, an 8.2% increase from 277,018 orders in Q1 2008.
First quarter results also are cause for optimism, because sales are not typically strong during the holiday shopping season, Hardy says. “We see the trend continuing with record sales for days and months so far in the second quarter.”