Soft home a bright spot in MSLO's otherwise lackluster 3Q
Home & Textiles Today Staff -- Home Textiles Today, October 28, 2010
New York - Sales of home décor and home improvement product, in particular home textiles, helped Martha Stewart Living Omnimedia merchandising business deliver strong results in the third quarter even as the company's overall results were lackluster.
Robin Marino, MSLO president and ceo of merchandising, attributed her division's favorable performance to the "continued expansion of our product line at The Home Depot, solid results for our Martha Stewart Collection at Macy's, and our Martha Stewart crafts line."
She added the company also had a "very strong response to our Martha Stewart pets line at PetSmart stores and on petsmart.com."
MSLO's merchandising revenue was up 7% to $9.6 million over the prior year's $8.9 million, "with key partnerships across our Martha Stewart and Emeril brands demonstrating year-over-year sales increases in quarter," she added.
Merchandising's operating income was $5.5 million for the third quarter, compared to $3.5 million last year.
By comparison, MSLO revenues declined 0.2% to $49.7 million in the third quarter from $49.8 million in the year-ago period.
Showing improvement was the company's third quarter operating loss, which was $(7.9) million compared to $(11.7) million for 2009's third quarter. MSLO said this year's third quarter benefited from both the smaller cash accrual and the absence of any non-cash bonus accrual, which was included in last year's third quarter.
Net loss per share was 16 cents versus a net loss per share of 22 cents for the third quarter of 2009.
Marino offered color on the company's various merchandising activities over the quarter.
"We're feeling great with our home improvement line at The Home Depot," which to date spans 14 product categories.
A highlight "that has been very well-received by consumers" has been the Martha Stewart special-order carpet program, Marino noted, which launched in the third quarter and was supported by television and print media advertising. The collection comprises 36 nylon styles that come in a palette that matches directly with the brand's paint line.
The Martha Stewart pet line at PetSmart also launched in the third quarter. Shopper response has been "very positive" thus far, and the company plans to expand its product offering with several new items, including some for cats.
Last month marked the third anniversary of the Martha Stewart Collection at Macy's, "and we think there's a lot to celebrate," Marion said.
"In short period of time we've emerged as the No. 1 brand in the Macy's Home Store," she continued. "We had another solid performance in the third quarter, driven by sales of soft home textiles."
Another plus at Macy's has been the performance of the lower price point Martha Stewart Essentials program, which "launched successfully in the quarter."
Martha Stewart Crafts also "performed well" in the quarter, due to expanded distribution, including shipments of seasonal Halloween products into Jo-Ann Stores, and Stewart's appearance in July on the Home Shopping Network (HSN).
"For the past five years, we have been focused on diversifying and expanding our merchandising business for long-term growth and we are seeing our efforts bear fruit in this quarter's results," said Charles Koppelman, executive chairman and principal executive officer. "We are applying the same aggressive mindset to our broadcasting business with our slate of new programming on Hallmark Channel."
Broadcasting has been challenging for MSLO lately, he added, "due largely to the remaining run-off results from syndication in the quarter. Our Internet business continues to perform very well and our publishing business had a solid quarter."
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