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These excerpts taken from the CWTR 10-Q filed Jun 11, 2009. Net Sales
Net sales consist of retail and direct sales, which include revenue from our co-branded credit card program and shipping fees received from customers for delivery of merchandise.
Net sales decreased during the three months ended May 2, 2009 as compared with the three months ended May 3, 2008 primarily due to an 18.6 percent decrease in comparable premium store sales(1) and a $26.6 million decrease in sales through our direct segment. These decreases were partially offset by net sales generated by the addition of 36 premium retail stores and five merchandise clearance outlet stores since May 3, 2008.
We believe our sales performance for the three months ended May 2, 2009 was negatively impacted by a highly promotional retail environment accompanied by difficult macroeconomic conditions, which are evidenced in our business by a highly competitive retail selling environment, low retail store traffic levels and a shift in customer purchasing toward more value priced merchandise. During the three months ended May 2, 2009, we experienced a decline in comparable premium retail store traffic of 19.1 percent and a decrease in average transaction value of direct sales of 12.3 percent as compared to the same period in 2008. The average transaction value of premium retail stores was relatively flat for the three months ended May 2, 2009, as compared to the same three-month period in 2008. During the three months ended May 2, 2009, catalog circulation decreased by 10.6 million, or 35.9 percent, compared to the three months ended May 3, 2008, which we believe also contributed to lower total net sales in our phone and mail channels.
(1) We define comparable premium stores as those stores in which the gross square footage has not changed by more than 20 percent in the previous 16 months and which have been open for at least 16 consecutive months (provided that store has been considered comparable for the entire quarter) without closure for seven consecutive days or moving to a different temporary or permanent location. Due to the extensive promotions that occur as part of the opening of a premium store, we believe waiting sixteen months rather than twelve months to consider a store to be comparable provides a better view of the growth pattern of the premium retail store base. During the three months ended May 2, 2009, the comparable premium store retail base included 271 premium retail stores compared to 211 premium retail stores for the same period of fiscal 2008. The calculation of comparable store sales varies across the retail industry and as a result, the calculations of other retail companies may not be consistent with our calculation.
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In addition, shipping fees received from customers for delivery of merchandise decreased by $5.5 million from $11.2 million for the three months ended May 3, 2008, to $5.7 million for the three months ended May 2, 2009, which is associated with lower order volume.
Net Sales
The $16.2 million decrease in retail segment net sales for the three months ended May 2, 2009 as compared with the three months ended May 3, 2008 is primarily the result of a decrease in net sales in our comparable premium retail stores of 18.6 percent. This decrease in comparable store sales reflects a decrease in comparable premium retail store traffic of 19.1 percent for the three months ended May 2, 2009 as compared to the three months ended May 3, 2008. This decrease was partially offset by net sales generated from the addition of 36 premium retail stores since May 3, 2008.
Additionally, net sales from merchandise clearance outlet stores increased $1.4 million, which includes the addition of five outlet stores, in the three months ended May 2, 2009 as compared with the three months ended May 3, 2008. Net sales generated from our co-branded credit card and day spas remained relatively flat for the three months ended May 2, 2009 as compared with the three months ended May 3, 2008.
Net Sales
The direct segment net sales decreased $26.6 million during the three months ended May 2, 2009 as compared to the three months ended May 3, 2008. Sales through our Internet channel decreased $17.3 million from $63.7 million for the three months ended May 3, 2008 to $46.4 million for the three months ended May 2, 2009. Sales from our phone and mail channel for the same period decreased $9.3 million from $20.5 million to $11.2 million.
The decrease in Internet business net sales is primarily due to fewer orders over the Internet, fewer catalogs mailed, and an approximate 12.3 percent decrease in average transaction value during the period as a result of higher levels of Internet markdowns. Phone and mail net sales were also impacted by fewer orders and 10.6 million, or 35.9 percent, fewer catalogs mailed in addition to an approximate 1.5 percent decrease in average transaction value during the period.
Phone and mail net sales are derived from orders taken from customers over the phone or through the mail. Phone and mail are used as a brand marketing vehicle to drive sales in all channels and we encourage customers to choose the channel they deem most convenient. Sales made through other channels that we believe were driven by the initial receipt of a catalog are not included in phone and mail net sales. Consequently, as customers choose to purchase merchandise through other channels, we expect phone and mail business net sales to continue to generally decrease as a percent of total net sales.
Direct segment net sales were also negatively impacted by a decrease of $5.5 million in shipping revenue during the three months ended May 2, 2009 as compared to the three months ended May 3, 2008, which is associated with lower order volume. This was partially offset by an increase of $0.3 million in co-branded credit card program revenue over the same period.
These excerpts taken from the CWTR 10-K filed Apr 1, 2009. Net Sales Net sales consist of retail and direct sales, which include co-branded credit card program marketing fees, revenue sharing and sales royalty revenue and shipping fees received from customers for delivery of merchandise. Net sales decreased during fiscal 2008 as compared to fiscal 2007 primarily due to decreases in comparable premium store sales and decreases in sales through our direct segment. This decrease was partially offset by sales resulting from the addition of 42 premium retail stores and five merchandise clearance outlet stores since February 2, 2008. 31 Comparable premium retail store(2) sales growth by quarter is as follows:
We believe our sales performance for fiscal 2008 was negatively impacted by the current challenging economic conditions, which are evidenced in our business by a highly competitive retail selling environment, low retail store traffic levels and a shift in customer purchasing toward more value priced merchandise. During fiscal 2008, we experienced a decline in comparable premium retail store traffic of 15.5% and a decrease in average transaction value in both our premium retail stores and direct channel of 3.8% and 7.3%, respectively, as compared to fiscal 2007. The decrease in average transaction value was primarily due to higher levels of markdowns(3) in both segments. During fiscal 2008, catalog circulation also decreased by 42.6 million, or 33.1 percent, compared to fiscal 2007.
Shipping fees received from customers for delivery of merchandise decreased $14.7 million to $33.3 million for fiscal 2008 as compared to fiscal 2007 as a result of lower direct sales in fiscal 2008. We experienced an increase in co-branded credit card marketing fee revenue and royalty revenue of $1.3 million for fiscal 2008 as compared to fiscal 2007. The increase in revenue from the co-branded credit card program is the result of an increase in sales royalty and revenue sharing. Net Sales Net sales consist of retail and direct sales, which include co-branded credit card program marketing fees, revenue sharing and sales royalty revenue and shipping fees received from customers for delivery of merchandise. Net sales decreased during fiscal 2008 as compared to fiscal 2007 primarily due to decreases in comparable premium store sales and decreases in sales through our direct segment. This decrease was partially offset by sales resulting from the addition of 42 premium retail stores and five merchandise clearance outlet stores since February 2, 2008. 31 Comparable premium retail store(2) sales growth by quarter is as follows:
We believe our sales performance for fiscal 2008 was negatively impacted by the current challenging economic conditions, which are evidenced in our business by a highly competitive retail selling environment, low retail store traffic levels and a shift in customer purchasing toward more value priced merchandise. During fiscal 2008, we experienced a decline in comparable premium retail store traffic of 15.5% and a decrease in average transaction value in both our premium retail stores and direct channel of 3.8% and 7.3%, respectively, as compared to fiscal 2007. The decrease in average transaction value was primarily due to higher levels of markdowns(3) in both segments. During fiscal 2008, catalog circulation also decreased by 42.6 million, or 33.1 percent, compared to fiscal 2007.
Shipping fees received from customers for delivery of merchandise decreased $14.7 million to $33.3 million for fiscal 2008 as compared to fiscal 2007 as a result of lower direct sales in fiscal 2008. We experienced an increase in co-branded credit card marketing fee revenue and royalty revenue of $1.3 million for fiscal 2008 as compared to fiscal 2007. The increase in revenue from the co-branded credit card program is the result of an increase in sales royalty and revenue sharing. Net Sales Net sales consist of retail and direct sales, which include co-branded credit card program marketing fees, revenue sharing Net 31 Comparable
We believe our sales performance for fiscal 2008 was negatively impacted by the current challenging economic conditions, which are evidenced in
Shipping fees received from customers for delivery of merchandise decreased $14.7 million to $33.3 million for fiscal 2008 as Net Sales The $23.7 million decrease in retail segment net sales for fiscal 2008 as compared with fiscal 2007 is primarily the result of a decrease in net sales in our comparable premium retail stores as disclosed in the table above under "Results of Operations—Net Sales." This decrease in comparable store sales reflects a decrease in comparable premium retail store traffic of 15.5 percent during fiscal 2008 as compared to fiscal 2007. During fiscal 2008, we also experienced a decrease in average transaction value of premium retail stores of 3.8 percent as compared to fiscal 2007. The decrease in average transaction value was primarily due to higher levels of in-store markdowns. This decrease was partially offset by net sales from the addition of 42 premium retail stores and five merchandise clearance outlet stores since February 2, 2008. Additionally, retail segment net sales increased as a result of increases of $5.6 million in net sales from merchandise clearance outlet stores, $2.8 million in net sales from our day spas, and $0.3 million in co-branded credit card program revenue in fiscal 2008 as compared with fiscal 2007. Net Sales The $23.7 million decrease in retail segment net sales for fiscal 2008 as compared with fiscal 2007 is primarily the result of a decrease in net sales in our comparable premium retail stores as disclosed in the table above under "Results of Operations—Net Sales." This decrease in comparable store sales reflects a decrease in comparable premium retail store traffic of 15.5 percent during fiscal 2008 as compared to fiscal 2007. During fiscal 2008, we also experienced a decrease in average transaction value of premium retail stores of 3.8 percent as compared to fiscal 2007. The decrease in average transaction value was primarily due to higher levels of in-store markdowns. This decrease was partially offset by net sales from the addition of 42 premium retail stores and five merchandise clearance outlet stores since February 2, 2008. Additionally, retail segment net sales increased as a result of increases of $5.6 million in net sales from merchandise clearance outlet stores, $2.8 million in net sales from our day spas, and $0.3 million in co-branded credit card program revenue in fiscal 2008 as compared with fiscal 2007. Net Sales Direct segment net sales decreased $103.5 million during fiscal 2008 as compared to fiscal 2007. Sales through our Internet channel decreased $59.7 million, from $271.0 million in fiscal 2007 to $211.3 million in fiscal 2008. Sales from our phone and mail channel for the same period decreased $43.7 million, from $105.3 million to $61.6 million. 34 The decrease in Internet business net sales is primarily due to fewer orders over the Internet, fewer catalogs mailed, and an approximate 7.4 percent decrease in average transaction value during fiscal 2008 as a result of higher levels of Internet markdowns. The decrease in phone and mail businesses net sales was also impacted by fewer orders and less catalogs mailed in addition to an approximate 0.8 percent decrease in average transaction value during fiscal 2008 as compared to fiscal 2007. Phone and mail net sales are derived from orders taken from customers over the phone or through the mail. Catalogs are used as a brand marketing vehicle to drive sales in all channels and we encourage customers to choose the channel they deem most convenient. Sales made through other channels that we believe were driven by the initial receipt of a catalog are not included in phone and mail net sales. Consequently, as customers choose to purchase merchandise through other channels, we expect catalog business net sales to continue to generally decrease as a percent of total net sales. Direct segment net sales were also negatively impacted by a decrease of $14.7 million in shipping revenue in fiscal 2008 as compared to fiscal 2007 as a result of lower direct sales in fiscal 2008. These decreases were offset by an increase of $1.0 million in co-branded credit card program revenue over the same periods. Net Sales Direct segment net sales decreased $103.5 million during fiscal 2008 as compared to fiscal 2007. Sales through our Internet channel decreased $59.7 million, from $271.0 million in fiscal 2007 to $211.3 million in fiscal 2008. Sales from our phone and mail channel for the same period decreased $43.7 million, from $105.3 million to $61.6 million. 34 The decrease in Internet business net sales is primarily due to fewer orders over the Internet, fewer catalogs mailed, and an approximate 7.4 percent decrease in average transaction value during fiscal 2008 as a result of higher levels of Internet markdowns. The decrease in phone and mail businesses net sales was also impacted by fewer orders and less catalogs mailed in addition to an approximate 0.8 percent decrease in average transaction value during fiscal 2008 as compared to fiscal 2007. Phone and mail net sales are derived from orders taken from customers over the phone or through the mail. Catalogs are used as a brand marketing vehicle to drive sales in all channels and we encourage customers to choose the channel they deem most convenient. Sales made through other channels that we believe were driven by the initial receipt of a catalog are not included in phone and mail net sales. Consequently, as customers choose to purchase merchandise through other channels, we expect catalog business net sales to continue to generally decrease as a percent of total net sales. Direct segment net sales were also negatively impacted by a decrease of $14.7 million in shipping revenue in fiscal 2008 as compared to fiscal 2007 as a result of lower direct sales in fiscal 2008. These decreases were offset by an increase of $1.0 million in co-branded credit card program revenue over the same periods. Net Sales The $23.7 million decrease in retail segment net sales for fiscal 2008 as compared with fiscal 2007 is primarily the result of a This Net Sales Direct segment net sales decreased $103.5 million during fiscal 2008 as compared to fiscal 2007. Sales through our Internet 34
The decrease in Internet business net sales is primarily due to fewer orders over the Internet, fewer catalogs mailed, and an approximate 7.4 percent Phone Direct Net Sales Net sales consist of retail and direct sales, which include co-branded credit card program marketing fee and sales royalty revenue and shipping fees received from customers for delivery of merchandise. Net sales increased during fiscal 2007 as compared with fiscal 2006 primarily due to the addition of 66 premium retail stores and four merchandise clearance outlet stores during fiscal 2007. This increase in net sales was offset by a decrease in comparable premium store sales during fiscal 2007 as compared with fiscal 2006. We also experienced an overall decrease in net sales in our direct segment as net sales from our phone and mail channel decreased while being partially offset by a slight increase in net sales from our Internet channel. Comparable premium retail store sales growth by quarter is as follows:
We believe our sales performance for fiscal 2007 was negatively impacted by a highly promotional retail environment accompanied by difficult macroeconomic conditions and an over-assortment of merchandise that did not differentiate us from our competitors. In fiscal 2007, we experienced a decline in premium retail store traffic of 6.5% and a decrease in average transaction value of premium retail stores of 6.1% as compared to fiscal 2006. The decrease in average transaction value in 2007 was primarily due to higher levels of markdowns and discounts due to increased promotional and clearance activity, including the discounts associated with our national magazine advertisements. 36 During fiscal 2007 we increased our national magazine advertising circulation by 1.5 percent compared to fiscal 2006. Catalog circulation also increased by 9.9 million or 8.3 percent during the same period, from 118.7 million catalogs to 128.6 million catalogs. The increase in circulation was primarily due to additional Coldwater Creek and Clearance catalog mailings. We also added approximately 605,000 net new addresses to our e-mail database during fiscal 2007 along with more targeted e-mail campaigns, which resulted in an additional 23.5 percent or 124.4 million e-mails being delivered in fiscal 2007 as compared to fiscal 2006. Shipping fees received from customers for delivery of merchandise increased $1.1 million from $46.9 million in fiscal 2006 to $48.0 million in fiscal 2007. We also experienced a decrease in co-branded credit card marketing fee revenue and royalty revenue of $0.6 million and $0.1 million, respectively. Net Sales Net sales consist of retail and direct sales, which include co-branded credit card program marketing fee and sales royalty revenue and shipping fees received from customers for delivery of merchandise. Net sales increased during fiscal 2007 as compared with fiscal 2006 primarily due to the addition of 66 premium retail stores and four merchandise clearance outlet stores during fiscal 2007. This increase in net sales was offset by a decrease in comparable premium store sales during fiscal 2007 as compared with fiscal 2006. We also experienced an overall decrease in net sales in our direct segment as net sales from our phone and mail channel decreased while being partially offset by a slight increase in net sales from our Internet channel. Comparable premium retail store sales growth by quarter is as follows:
We believe our sales performance for fiscal 2007 was negatively impacted by a highly promotional retail environment accompanied by difficult macroeconomic conditions and an over-assortment of merchandise that did not differentiate us from our competitors. In fiscal 2007, we experienced a decline in premium retail store traffic of 6.5% and a decrease in average transaction value of premium retail stores of 6.1% as compared to fiscal 2006. The decrease in average transaction value in 2007 was primarily due to higher levels of markdowns and discounts due to increased promotional and clearance activity, including the discounts associated with our national magazine advertisements. 36 During fiscal 2007 we increased our national magazine advertising circulation by 1.5 percent compared to fiscal 2006. Catalog circulation also increased by 9.9 million or 8.3 percent during the same period, from 118.7 million catalogs to 128.6 million catalogs. The increase in circulation was primarily due to additional Coldwater Creek and Clearance catalog mailings. We also added approximately 605,000 net new addresses to our e-mail database during fiscal 2007 along with more targeted e-mail campaigns, which resulted in an additional 23.5 percent or 124.4 million e-mails being delivered in fiscal 2007 as compared to fiscal 2006. Shipping fees received from customers for delivery of merchandise increased $1.1 million from $46.9 million in fiscal 2006 to $48.0 million in fiscal 2007. We also experienced a decrease in co-branded credit card marketing fee revenue and royalty revenue of $0.6 million and $0.1 million, respectively. Net Sales Net sales consist of retail and direct sales, which include co-branded credit card program marketing fee and sales royalty Net Comparable
We 36 During Shipping Net Sales The $110.9 million increase in retail segment net sales for fiscal 2007 as compared with fiscal 2006 is primarily the result of the addition of 66 premium retail stores, four merchandise clearance outlet stores and three day spas during fiscal 2007, which was partially offset by a decrease in net sales in our comparable premium retail stores as disclosed in the table above under net sales. Also included in the retail segment net sales growth during fiscal 2007 as compared with fiscal 2006 was an additional $9.4 million in net sales from merchandise clearance outlet stores combined with an additional $6.3 million in net sales from our day spa concept. These increases were offset by a reduction of $0.6 million in co-branded credit card program fee and royalty revenue. In addition to the increase in our store base, we believe increased promotional and clearance activity, and increased 38 circulation in both national magazine advertisements and catalogs also contributed to our retail segment net sales. Net Sales The $110.9 million increase in retail segment net sales for fiscal 2007 as compared with fiscal 2006 is primarily the result of the addition of 66 premium retail stores, four merchandise clearance outlet stores and three day spas during fiscal 2007, which was partially offset by a decrease in net sales in our comparable premium retail stores as disclosed in the table above under net sales. Also included in the retail segment net sales growth during fiscal 2007 as compared with fiscal 2006 was an additional $9.4 million in net sales from merchandise clearance outlet stores combined with an additional $6.3 million in net sales from our day spa concept. These increases were offset by a reduction of $0.6 million in co-branded credit card program fee and royalty revenue. In addition to the increase in our store base, we believe increased promotional and clearance activity, and increased 38 circulation in both national magazine advertisements and catalogs also contributed to our retail segment net sales. Net Sales The direct segment net sales decreased $14.1 million during fiscal 2007 as compared to fiscal 2006. The decrease was driven by a 16.9 percent decrease in net sales from our phone and mail channel, offset by a 2.8 percent increase in Internet business net sales. Internet business net sales grew during the period as a result of increased promotional and clearance activity, the addition of approximately 605,000 net new addresses to our e-mail database during fiscal 2007, increased e-mail circulation of 23.4 percent or 122.9 million e-mails to customers in fiscal 2007, as compared to fiscal 2006, along with more targeted e-mail campaigns. Catalog business net sales experienced a 16.9 percent decline during fiscal 2007 as compared to fiscal 2006. Catalog net sales are derived from orders taken from customers over the phone or through the mail. Catalogs are used as a brand marketing vehicle to drive sales in all channels as we encourage customers to choose the channel they deem most convenient. Sales made through other channels that we believe were driven by the initial receipt of a catalog are not included in catalog net sales. Consequently, as customers choose to purchase merchandise through other channels, we expect catalog business net sales to continue to generally decrease as a percent of total net sales. Included in the direct segment net sales decrease was an additional $0.1 million reduction in co-branded credit card program fee and royalty revenue, offset by an increase in direct shipping revenue of $1.4 million during fiscal 2007 as compared to fiscal 2006. Net Sales The direct segment net sales decreased $14.1 million during fiscal 2007 as compared to fiscal 2006. The decrease was driven by a 16.9 percent decrease in net sales from our phone and mail channel, offset by a 2.8 percent increase in Internet business net sales. Internet business net sales grew during the period as a result of increased promotional and clearance activity, the addition of approximately 605,000 net new addresses to our e-mail database during fiscal 2007, increased e-mail circulation of 23.4 percent or 122.9 million e-mails to customers in fiscal 2007, as compared to fiscal 2006, along with more targeted e-mail campaigns. Catalog business net sales experienced a 16.9 percent decline during fiscal 2007 as compared to fiscal 2006. Catalog net sales are derived from orders taken from customers over the phone or through the mail. Catalogs are used as a brand marketing vehicle to drive sales in all channels as we encourage customers to choose the channel they deem most convenient. Sales made through other channels that we believe were driven by the initial receipt of a catalog are not included in catalog net sales. Consequently, as customers choose to purchase merchandise through other channels, we expect catalog business net sales to continue to generally decrease as a percent of total net sales. Included in the direct segment net sales decrease was an additional $0.1 million reduction in co-branded credit card program fee and royalty revenue, offset by an increase in direct shipping revenue of $1.4 million during fiscal 2007 as compared to fiscal 2006. Net Sales The $110.9 million increase in retail segment net sales for fiscal 2007 as compared with fiscal 2006 is primarily the result of Also 38 circulation Net Sales The direct segment net sales decreased $14.1 million during fiscal 2007 as compared to fiscal 2006. The decrease was driven by a Internet Catalog Included | EXCERPTS ON THIS PAGE:
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