Indigo Cuts First-Qtr. Loss; Sales Rise to $164M

Indigo Books & Music Inc., the largest book retailer in Canada, reported continued solid sales results for its first quarter of fiscal year 2004.

Indigo announced its eighth consecutive quarter of revenue growth, with first-quarter revenues improved by 5.1% over the same period last year. Total consolidated revenues in the first quarter increased to C$164.2 million, up from C$156.3 million in the same period last year. Superstores had a comparative sales increase of 3.9% while mall stores saw an increase of 0.3%, reversing the declining trend seen in that format over the previous two quarters.

"We are pleased with this quarter's performance, particularly given the challenges of SARS, a drop in tourism and general global uncertainty," said Heather Reisman, Indigo's chief executive officer.

Strong sales of Harry Potter and the Order of the Phoenix offset the operation of fewer stores (88 superstores and 175 mall stores, as opposed to 89 and 182 in the same period last year). Notably, online sales in the first quarter grew 65.3% over the same period last year, which the retailer said was "driven by sales of Harry Potter, improvements in selection and delivery, as well as increased marketing and promotional activity."

Despite fewer stores and an overall harsh economic climate, Indigo's operating losses improved 16.3%, to C$2.4 million, from C$2.9 million in the first quarter last year, driven by factors that included higher sales and lower store operating expenses. Net loss for the first quarter was C$11.5 million, or 48¢ per share, compared to a net loss of C$13.2 million (63¢ per share) in the first quarter last year.

Indigo Books and Music also operates stores under the names Chapters and Coles.