a purr-fect second quarter, sales for Mad Catz's third quarter haven't been so good, as the peripheral manufacturer reported losses of $26.9 million for the period ending December 31. To help you wrap your mind around how big a loss this is, during the same period in 2008, Mad Catz reported net income of only $3.3 million. The company was pretty much down all across the board, with gross profit for the quarter down 16.7% to $10.5 million. Net sales were up, however, to $40.8 million, a 19% increase compared to the same period in 2008. Darren Richardson, president and CEO, places the blame on "provisions for increased inventory reserves, higher royalty expenses, increased costs due to added product development staff and higher shipment costs." In other words: business is tough.
Richardson says the inventory reserves were necessary due to the "uncertain state of the economy and the retail industry." Yet, from here on out, he remains optimistic, placing profit margins "no lower than the range of those experienced in our latest three and nine month periods." With hot items on the horizon like those RE5 accessories, how can the company not expect to do well?