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Sharper Image Dulls a Little

SAN FRANCISCO-According to Lehman Brothers, the lack of a must-have item hurt the Sharper Image this holiday season.

By Dees Stribling | Updated on January 23, 2005

SAN FRANCISCO-In the wake of news that put sales below expectations and comp-store sales down for specialty retailer Sharper Image Corp., Lehman Brothers has offered a cautious prognosis for the company. “The Sharper Image has a strong brand identity in our opinion, but is currently lacking a must-have product to drive customer traffic,” wrote analyst Scott Nesson in the report, which was issued on Friday. “Despite a favorable customer response to newer product introductions… sales at Sharper Image continue to be hampered by the lack of a Must-Have product.”

Still, the report noted that “while the shares may lack a near-term catalyst in our view, we remain optimistic about management’s increasing focus on expense control, and we see limited downside at current valuation levels.”

In December, the Sharper Image reported that sales were disappointing, because management expected fourth quarter sales to be up 7% to 9%, compared with a previous guidance of a 15% to 18% increase. Also, same-store sales in December declined 7%, versus a tough comparison of 21% in last year’s period.

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