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Sharper Image warns on 1Q
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April 12, 2001: 12:29 p.m. ET
Specialty retailer cites higher advertising, infrastructure costs for wider loss
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NEW YORK (CNNfn) - Upscale retailer Sharper Image Inc. warned Thursday it expects a sharply wider first-quarter loss than Wall Street expected, reflecting higher advertising and infrastructure costs.
The San Francisco-based specialty chain, which has ridden out tough economic times on the strength of Razor Scooter sales and its own private brands, said if current sales trends continue, it expects to post a first quarter loss of between 22 cents and 27 cents a share. Analysts on average are expecting a loss of 12 cents on the quarter, according to earnings tracker First Call.
The company said advertising expenditures, specifically for an television infomercial for an air purifier, combined with existing infrastructure costs, came in higher than planned.
 Sharper Image (SHRP: down $1.42 to $8.95, Research, Estimates), along with most other retailers, struggled with same-store sales in March as consumers, increasingly worried about corporate layoffs and a sluggish economy, curbed spending.
Separately, Sharper Image reported a 1 percent decline in March sales at same-store sales, a closely watched figure measuring sales at stores open at least a year. Excluding declining Razor scooter sales, the company said it would have posted a 4 percent same-store sales increase.
Otherwise, total company sales increased 17 percent to $23 million from $19.8 million a year ago. Total store sales rose 6 percent during the month.
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The company said the primary driver of sales growth came from its own products, such as the Ionic Breeze Quadra air purifier, a hands-free car cell phone system, digital recording devices, and a CD radio/alarm clock.
"While we are encouraged by the sales results during this difficult economic climate, they were below our expectations," CEO Richard Thalheimer said. "... However, we remain strongly committed to our long-term strategy and believe this will continue to produce excellent financial results over time." 
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