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RAPAPORT... Charles & Colvard reported that its revenue rose 28.8 percent year on year to $6.5 million during the second quarter that ended on June 30. However, costs and expenses surged 63 percent to $7.4 million, leading to an operating loss of $858,311. The company recorded a loss of $491,585, or 2 cents per share, for the quarter compared with a profit of $548,572, or 3 cents per share, one year ago. Loose moissanite gemstone net sales were flat at approximately $4.1 million. Finished jewelry sales jumped 151 percent to approximately $2.4 million. The company sold slow moving inventory at reduced margins, negatively impacting its overall gross margin percentage in the second quarter. Company expenses rose primarily due to its investments in marketing and branding initiatives to better position Charles & Colvard’s product lines. “We continued to take steps in the second quarter to strategically support and align our growing retail brands for the holiday season and future growth,” said Randy N. McCullough, the CEO of Charles & Colvard. “The sale of close-out jewelry during the quarter hampered our gross margin percentage, but we believe this is a limited occurrence event and an important step in fine-tuning our inventory and maintenance of our relationship with key distribution channels, positioning them with the opportunity for strong sales in the second half of the year.” Steve Larkin, the company's chief operating officer, explained that they've achieved a wider distribution channel through a new relationship with Amazon.com. ''This is a testament to our continued effort to promote moissanite and broaden consumer access to the brightest gemstone available.''
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