Indigo Reports a Bit Less Black Ink
by John Mutter -- Publishers Weekly, 2/23/2004
In the third quarter ended December 27, 2003, sales at Indigo Books & Music, Canada's largest book retailer, rose 0.7%, to C$279 million ($212 million), while net profits dropped 6.5%, to C$28.8 million ($21.9 million). Sales at superstores open at least a year rose 1.4%, while sales at mall stores open at least a year dropped 1.7%. For the company as a whole, comparable-store sales rose 1.3%.
Continued "margin and marketing pressure" on chapters.indigo.ca, Indigo's online business, dragged profits down. Still, sales at the unit rose 25% in the quarter, to C$16 million ($12.2 million).
The company called the demand for gift certificates in the third quarter "unprecedented"; sales of gift cards rose 20% over the same period in 2002. (Because gift certificates are not recorded as revenue until redeemed, their effect on the bottom line is yet to be seen.)
For the year to date, sales rose 1.5%, to C$613.8 million ($466.5 million), while net profit dropped 3.2%, to C$9.6 million ($7.3 million). Indigo noted that earnings were hurt by a one-time charge of C$1.4 million ($1.1 million) for costs associated with the company's "supply chain redesign project," which, as CEO Heather Reisman put it, has the goal of "having the right selection, available at the right location, at the right time, in the right quantities and in the right condition."
