February 3, 2010, 12:00 AM

Quarterly web sales drop once more for Indigo Books & Music

It was another disappointing e-commerce quarter for Canada’s biggest multichannel books retailer. For Q3 of fiscal 2010, Indigo’s web sales in U.S. dollars declined 2.8%, and were down 3.8% year-to-date.

Quarterly web sales fell once again for Indigo Books & Music Inc., Canada’s biggest multichannel books retailer.

For the third quarter of fiscal 2010 ended Dec. 26 Indigo, No. 148 in the Internet Retailer Top 500 Guide (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name), reported:

  • Web sales in U.S. dollars declined 2.8% to $27.6 million from $28.4 million in the prior year. In Canadian dollars, e-commerce revenue declined 2.7% from $30.1 million in the third quarter of fiscal 2009 to $29.3 million in the third quarter of fiscal 2010. The difference in percentages between U.S. and Canadian dollars reflects fluctuations in year-over-year exchange rates and currency conversion.
  • Total sales in U.S. dollars increased year over year 3.1% to $320.7 million from $311.1 million in the previous year and in Canadian dollars 3.1% to $340.1 million from $330.0 million.
  • Net earnings in U.S. dollars were $32.5 million, compared with $25.3 million in the prior year. In Canadian dollars, Indigo posted net earnings of $34.5 million compared with net earnings of $26.8 million in the prior year.
  • In U.S. and Canadian currency the web accounted for about 8.6% of sales in the third quarter of the 2010 fiscal year.
  • Same-store sales for the chain’s superstores increased 3.4%, but decreased 1.6% for smaller format stores.
“We are satisfied with our results through what has proven to be a very turbulent time for most retailers,” says CEO Heather Reisman.

For the first three quarters of fiscal 2010:

  • In U.S. dollars, web sales declined 3.8% to $63.9 million from $66.4 million in the prior year. In Canadian dollars e-commerce revenue declined 3.8% to $67.6 million from $70.3 million in the prior year.
  • Total sales in U.S. dollars increased year over year 2% to $699.6 million from $685.6 million in the previous year and in Canadian dollars 2.1% to $740.7 million from $725.8 million in the previous year.
  • In U.S. and Canadian currency the web accounted for about 9.1% of sales in the second quarter of the 2010 fiscal year.
  • Net earnings in U.S. dollars were $32.5 million, compared with $25.3 million in the prior year. In Canadian dollars, Indigo posted net earnings of $34.4 million compared with net earnings of $28.7 million in the prior year.
  • The retailer didn’t break out year-to-date comparable-store numbers.
In the third quarter of fiscal 2010, Indigo also spun off its e-book service unit, Shortcovers, as a separate company and rebranded it as Kobo Inc. The new company raised $16 million in funding from an international group of investors spanning mobile technology and retail companies including Borders Group Inc., which says Kobo will power a new e-book store to debut on Borders.com in the second quarter.

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