Gaiam Inc. reported its decision to prune its catalog caused its net revenue to come in flat in the first quarter ended March 31 compared with a year earlier.
Net revenues from sales of Gaiam-branded products decreased 2 percent to $34.5 million compared to the same quarter a year ago. Those sales increased 4 percent to $32.3 million when excluding planned declines in catalog sales. GAIA said sales to top 25 customers, excluding Target Corporation, increased 13 percent. Total revenues came in flat at $37.6 million.
As expected, sales fell by $5 million due to the West Coast port disruption and continued stock level issues at Target, which accounted for 29.3 percent of Gaiam's sales in 2014.
Gross margin was 45.8 percent, up 50 basis points from a year earlier thanks to increased sales through the high-margin Gaiam TV business.
Operating expenses rose to 53.4 percent of net sales from 51.9 percent in the year-ago quarter due to increased marketing expenses at Gaiam TV.
GAIA reported a net loss of $3.9 million, or 16 cent per share, compared to a net loss of $2.1 million, or 9 cents a year earlier. The difference was due primarily to the impact from foreign exchange and discontinued operations. The company ended the period with cash of $16.9 million compared to $15.8 million at Dec. 31, 2014 and no debt. Inventory was essentially flat.
CEO Lynn Powers said Gaiam's April 23rd launch at 1,100 Kohl's stores exceeded expectations.
“We've received tremendous media coverage, including The Today Show and E! Entertainment Television,” said Powers. “Kohl's has done an exceptional job merchandising the product via branded store-within-store displays.”
She said Gaiam expects sales and profits from its Gaiam branded products to grow this year thanks to athletic and children's yoga initiatives and improvements to online and mobile customer experiences.
Gaiam makes and sells yoga, fitness and wellness products and content through approximately 38,000 retail doors, 18,000 store within stores, 5,000 category management locations, and via its own e-commerce and catalog businesses.
