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Sharper Image Rebounds to Post Profit

Gadget retailer credits products, advertising for 25% increase in revenue in its second quarter.

August 22, 2003|From Bloomberg News

Home and personal gadgets retailer Sharper Image Corp. said Thursday that it swung to a second-quarter profit and predicted that net income for the year would rise more than expected.

Net income for the period ended July 31 was $807,000, or 5 cents a share, compared with a net loss of $617,000, or 5 cents, a year earlier. It beat the 3-cent average estimate of eight analysts polled by Thomson First Call. Sales rose 25% to $127.9 million from $102.4 million.

Sales of merchandise exclusive to Sharper Image stores, including personal coolers, automatic eyeglass cleaners, air filters and portable stereo and DVD systems, are boosting profit, Chief Financial Officer Jeffrey Forgan said. The San Francisco-based company also has increased sales through its catalog and on the Internet.

"The products we've got going and the way we're advertising is reaching a broader customer base, which is allowing us to mail more catalogs and open more stores," Forgan said in a telephone interview.

Sharper Image shares rose 34 cents to $28.85 on Nasdaq. They have risen 66% this year.

The company is spending more than $110 million annually to advertise its products, Forgan said. He expects sales of massage chairs, digital cameras and personal-care products -- including battery-powered hair trimmers -- to help boost profit for the rest of the year, especially in the holiday selling season.

The company raised its forecast for the year to $1.42 to $1.46 a share from $1.36 to $1.40. Sharper Image earned $1.12 a share in its fiscal year ended Jan. 31. It expects to open 25 new stores this year.

Sales at stores open at least a year rose 15% in the quarter. Catalog sales increased 11% to $32.2 million and Internet sales jumped 50% to $18.3 million.

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