Charles & Colvard Moissanite Q4 Sales Drop 35%
February 24, 08
The creators of moissanite, Charles & Colvard, announced a fourth quarter net sales plummet of 35 percent over 2006 to $7.9 million. Gross profit decreased by an even wider margin – 42 percent to $5.4 million, compared to $9.3 million in the previous year.
For the three months ended December 31, the company’s operating loss totaled $1.7 million, down from $1.9 million in 2006. Marketing and sales expense totaled 62 percent of net sales, as compared to 52 percent in 2006.
The company says is committed to all of its marketing and sales expenses prior to the beginning of the fourth quarter and was unable to adjust its spending when sales growth did not materialize.
Domestic sales in the fourth quarter decreased 40 percent to $6.6 million, while international sales increased 20 percent to $1.3 million, with strong results from all geographic regions.
Net loss for the period was $1.1 million, or $.06 per diluted share, as compared to a net income of $1.3 million, or $.07 per diluted share.
Charles & Colvard Chairman and CEO Bob Thomas commented, “We are disappointed with our sales and earnings results in the fourth quarter as the retail environment remains challenging and we face unique issues in our distribution model. With the uncertainty in the retail economic environment retailers are managing their inventory more conservatively.”
Thomas also noted that the company has engaged brand building company Kanter International “to evaluate [their] current business model and to make a recommendation to drive improved sales performance.”