Brookstone's earnings drop for Q3, stays ahead of operating plan

Merrimack, N.H. Specialty retailer Brookstone reported a loss on Wednesday of $20.8 million for the fiscal third quarter ended April 4, compared with a loss of $13 million for the same 13-week period a year ago.

The chain’s total net sales were $61.5 million, a 31.6% drop from the same period last year. Same-store sales also decreased 25.1% compared with last year.

While results were below last year’s levels, the chain reported that earnings were still “ahead of our operating plan,” said Philip Roizin, CEO, Brookstone.

Due to significantly lower mall traffic, the chain responded at the end of last year with a planned reduction of $30 million in overall operating expenses for 2009, including a 15% decrease in corporate headcount, and a freeze on all discretionary capital spending. The chain also pared down inventory levels by 25% during the first quarter, compared with last year.

"We have seen improvement in sales and customer count in the last two weeks of March and through April month-to-date as compared to the first quarter,” he said. “We expect this trend to be helped by the rollout of new Brookstone products for Mother's Day, Graduation and Father's Day.”

The chain operates 310 Brookstone Brand stores nationwide and in Puerto Rico.