Coastal Contacts Sales Increase 11 Percent to $53.7 Million in Second Quarter of 2013

By
VANCOUVER, British Columbia—Sales for online eyewear provider, Coastal Contacts, Inc. (NASDAQ: COA) (TSX: COA) increased 11 percent to $53.7 million for the second fiscal quarter ended April 30, 2013, as compared with the same period last year. Net loss for the quarter totaled $7.0 million compared to a net loss of $0.2 million in the prior year’s Q2. Sales for the first six months of the 2013 fiscal year, ended April 30, 2013, increased 12.4 percent to $108.6 million from $95.1 million for the same period last year. Net loss for the six-month period was $10.4 million compared to a net loss of $0.4 million in the previous year’s first half.

Coastal’s contact lens sales totaled $37.7 million during the second quarter of 2013, a 5 percent increase over the same period in 2012. Contact lens orders totaled 338, 462 during the second quarter of 2013, a 2 percent increase year over year. The average contact lens order size was $111.51 during the second quarter of 2013, compared to $108.17 during the same period in 2012. Over 70 percent of contact lens revenues and orders during the second quarter of 2013 were from repeat customers.

Coastal’s eyeglasses sales totaled $16 million during the second quarter of 2013, a 31 percent increase over the same period in 2012. The company shipped 265,597 frames during the quarter, and the average order size increased 40 percent to $73.26. During a conference call with investors on Monday, June 10, a Coastal spokesperson announced a “strategy shift, getting away from the first pair free promo” as the company “adjusts methods for acquiring new customers.” Gross profit for eyeglasses was $6.9 million or 43 percent of sales during the second quarter of 2013, down from 45 percent year over year. Private label eyeglasses brands represented 54 percent of frames shipped during the quarter.

Highlights of the quarter included opening its first U.S. eyeglasses production and distribution facility, as reported by VMail May 1, 2013, and signing vision care agreements with a leading benefits administrator, with two corporate clients (Paladin Security and BuildDirect.com), and with BC HRMA, a leading Canadian human resources association with 5,500 member companies and 3,000 affiliates.