Charles & Colvard, maker of moissanite, a popular alternative to diamonds, reported better-than-expected fourth-quarter earnings on Thursday as coronavirus lockdowns hit the jewelry business.
The company reported net sales of $4.4 million for the quarter ending June 30, a decrease of 42 percent compared to $7.6 million reported in the year-ago quarter. The analyst following the company expected net sales of $2.6 million for the quarter.
The maker of a more affordable alternative to diamonds saw an 18 percent decline in e-commerce sales, both on the company’s website and third-party websites, to $3 million, accounting for 68 percent of net sales, versus $3.6 million, or 48 percent of net sales a year ago. Meanwhile, retail and wholesale sales plunged 64 percent to $1.4 million, down from $4 million a year ago.
For the quarter, the company reported a net loss of 4 cents per share, but better than forecasts of a loss of 7 cents per share.
“During this quarter, despite these trying times, we were able to generate positive operating cash flow by taking proactive measures to contract and realign our business,” Charles & Colvard CEO Don O’Connell, who took over the top spot in June, said in the release.
During the quarter, the company received a $965,000 loan from the Paycheck Protection Program as part of the CARES Act. The company took steps to reduce its headcount.
“We rightsized the business across all functional areas including reorganizing the management team, reducing staff and pivoting our marketing and advertising efforts,” O’Connell added.
Meanwhile, the company added its fine jewelry to the Canadian department store Hudson’s Bay’s website. The company also rolled out its Virtual Bridal Ring Consultation service, letting customers shop for engagement rings remotely with a jewelry expert.
“We were able to capitalize on our in-stock inventory position to support multiple online channels that saw a growing demand as the traditional retail landscape shifted due to the impacts of COVID-19,” said O’Connell. “Due to these efforts, we began to see positive trends in June, which helped mitigate the continued impact of global shutdowns during the previous months.”
Shares of Charles & Colvard, Ltd. (CTHR) rose more than 8 percent to last trade near 73 cents in the pre-market session on Friday.
