8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 19, 2003

BROOKSTONE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	0-21406	06-1182895
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation)	File Number)	Identification No.)

17 RIVERSIDE STREET, NASHUA, NH	03062
(Address of principal executive offices)	(Zip Code)

603-880-9500

Registrant’s telephone number, including area code

Item 7.    Financial Statements, Pro Forma Financial Information and Exhibits

(c) Exhibits

99.1 November 19, 2003 Press Release

Item 12.    Results of Operations and Financial Condition.

The information in this Form 8-K, including the accompanying exhibit, is being furnished under Item 12 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

On November 19, 2003, Brookstone, Inc. issued a press release reporting its financial results for its third fiscal quarter ended November 1, 2003. A copy of the press release is set forth as Exhibit 99.1 and is incorporated by reference herein.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

November 24, 2003

By:    /s/    Philip W. Roizin                            

Philip W. Roizin

Executive Vice President, Finance

and Administration,

Treasurer and Secretary

(Principal Financial Officer and duly

authorized to sign on behalf of registrant)

EX-99.1

Exhibit 99.1

FOR:	BROOKSTONE, INC.
CONTACT:	Philip Roizin
	EVP of Finance and
	Administration
	(603) 880-9500
	Robert Fusco
	Investor Relations
	(603) 880-9500

FOR IMMEDIATE RELEASE

Strong Same Store Sales Drive Third Quarter Earnings Improvement Over 2002

Company Reaffirms Upwardly Revised Full Year Earnings Guidance

NASHUA, NH, November 19, 2003 – Specialty retailer Brookstone, Inc. (Nasdaq: BKST), known for its unique line of proprietary products, continued its record of year over year earnings improvement by announcing today that diluted earnings per share for the third quarter of 2003 improved 13.5 percent over 2002.

Total company sales for the 13-week period ended November 1, 2003, climbed 17.2 percent to $73.7 million, compared to $62.8 million for the third quarter 2002. Same-store sales surged 15.9 percent, while Direct Marketing sales increased 6.9 percent to $13.4 million on an 8.1 percent decrease in circulation.

For the third quarter 2003, Brookstone reported a net loss of $5.9 million, or $0.45 per diluted share, compared to a net loss of $6.7 million, or $0.52 per diluted share, in the third quarter of 2002.

Because of the seasonal nature of specialty retailing, Brookstone generally carries a loss over the first three quarters and makes its profit for the year in the fourth quarter.

Year-to-date, Brookstone total sales rose 12.8 percent, to $215.1 million, compared to $190.7 million for the first nine months of 2002. Same-store sales for the first nine months of 2003 climbed 9.9 percent, while sales in Direct Marketing increased 5.7 percent to $37.5 million, compared to $35.5 million for the first nine months of 2002. Net loss year-to-date is $14.6 million, or $1.13 per diluted share, as compared to a net loss in 2002 of $15.4 million, or $1.21 per diluted share.

Brookstone Chairman, President and Chief Executive Officer Michael Anthony said, “the strong third quarter results bode well for the Company as it enters the all-important Holiday shopping season.”

“We are extremely pleased with our strong performance in the third quarter and throughout the first nine months of 2003,” Mr. Anthony said. “We are clearly connecting with the customer with our range of unique, functional and proprietary products, the majority of which are designed and engineered in-house and available only at Brookstone. New product penetration remains strong.

With a number of outstanding new products just coming to market in the first part of the fourth quarter, we believe this Holiday season will be one of our most successful and profitable.”

Mr. Anthony continued: “I am also pleased to report that all segments of our businesses performed well over the third quarter and believe we are well positioned for continued success throughout the remainder of the year. We recorded double-digit same store sales increases during each month of the quarter, and are optimistic as we move into the Holiday selling season. We believe that our inventory position will be sufficient to support our strong sales trend.”

“Our New Store Design concept, which we are rolling out throughout 2003, continues to resonate with customers and as a group performed significantly above the company average. Year to date we have opened a total of 17 new stores and remodeled 13, all in the New Store Design.”

Mr. Anthony concluded: “Based on the strong performance of the first three quarters and the potential for success in the fourth quarter, we reaffirm our second upwardly revised earnings estimate for the year.”

Brookstone projects year-end earnings in 2003 of between $1.14 and $1.17 per diluted share, an increase over the $0.93 per diluted share the company earned in 2002.

Brookstone, Inc. is a specialty retailer that operates 271 Brookstone Brand stores nationwide and in Puerto Rico. Typically located in high-traffic regional shopping malls and airports, the stores feature unique and innovative consumer products. The Company also operates three stores under the Gardeners Eden Brand, and a direct marketing business that consists of three catalogs — Brookstone, Hard-to-Find Tools and Gardeners Eden — as well as e-commerce web sites at http://www.Brookstone.com and http://www.GardenersEden.com.

Statements in this release which are not historical facts, including statements about the Company’s confidence or expectations, earnings, anticipated operations of its e-commerce sites and those of third-party service providers, and other statements about the Company’s operational outlook, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the effectiveness of e-commerce technology and marketing efforts, availability of products, availability of adequate transportation of such products, and other factors detailed from time to time in the Company’s annual and other reports filed with the Securities and Exchange Commission. Words such as “estimate”, “project”, “plan”, “believe”, “feel”, “anticipate”, “assume”, “may”, “will”, “should” and similar words and phrases may identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof.

# # #

(tables follow)

Brookstone, Inc.

Consolidated Statement of Operations

($ in thousands)

(Unaudited)

	Thirteen weeks ended			Thirteen weeks ended			Thirty-nine weeks ended			Thirty-nine weeks ended
	November 1, 2003			November 2, 2002			November 1, 2003			November 2, 2002
Net sales	$	73,657		$	62,843		$	215,088		$	190,707
Cost of sales		51,993			46,320			152,010			139,875
Gross profit		21,664			16,523			63,078			50,832
Selling, general and administrative expenses		30,903			26,944			86,194			75,409
Gain on curtailment of retiree medical plan		—			—			—			(642	)
Loss from operations		(9,239	)		(10,421	)		(23,116	)		(23,935	)
Interest expense, net		298			340			609			965
Loss before taxes		(9,537	)		(10,761	)		(23,725	)		(24,900	)
Income tax benefit		(3,672	)		(4,089	)		(9,134	)		(9,462	)
Net Loss	$	(5,865	)	$	(6,672	)	$	(14,591	)	$	(15,438	)
Basic/diluted loss per share:
Net Loss	$	(0.45	)	$	(0.52	)	$	(1.13	)	$	(1.21	)
Weighted average shares outstanding – basic/diluted		13,158			12,772			12,949			12,711

Brookstone, Inc.

Consolidated Balance Sheet

($ in thousands)

	Unaudited
	November 1, 2003		November 2, 2002		February 1, 2003
Current Assets:
Cash and cash equivalents	$	1,544	$	1,971	$	54,144
Receivables, net		7,044		5,020		6,079
Merchandise inventories		84,771		79,539		58,987
Deferred income taxes		15,258		13,626		4,161
Other current assets		6,548		6,023		5,280
Total current assets		115,165		106,179		128,651
Deferred income taxes		5,091		4,352		5,854
Property and equipment, net		50,300		40,092		39,720
Intangible assets, net		4,191		4,501		4,413
Other assets		7,610		5,399		1,954
Total assets	$	182,357	$	160,523	$	180,592
Liabilities and Shareholders’ Equity
Current Liabilities:
Short-term borrowings	$	—	$	9,300	$	—
Accounts payable		27,001		21,861		10,720
Other current liabilities		26,137		20,629		33,197
Total current liabilities		53,138		51,790		43,917
Other long term liabilities		14,934		12,736		13,809
Long term obligation under capital lease		1,985		2,165		2,110
Commitments and Contingencies
Total shareholders’ equity		112,300		93,832		120,756
Total liabilities and shareholders’ equity	$	182,357	$	160,523	$	180,592