This quarter's gross margin was 35.2%, down from last year’s 36.9%; strategic pricing actions taken in the prior year and an unfavorable mix in common carriage freight versus parcel freight contributed to the margin decline.
This quarter's general and administrative expense decreased by 190 basis points to 10.1% primary from fixed cost leverage on higher sales partially offset by increased legal costs to enforce our intellectual property rights and increased amortization from software deployments.
This quarter’s marketing expense excluding advertising was 6.9%, unchanged from last year. This quarter's online advertising was 6.4% of Internet sales, down 70 basis points from last year due to improved efficiencies.
Fulfillment expense was 5.7% this quarter, a decrease of 100 basis points from last year primarily due to fixed cost leverage on higher sales. Technology expense was 1.8% this quarter, a decrease of 50 basis points from last year also due to fixed cost leverage on higher sales.Amortization of intangibles for this quarter was 22 basis points compared with 92 basis points for last year primarily due to the full amortization of certain intangible assets. Visitors increased for this quarter by 5.5% from last year to 28.6 million, which we attribute to greater online market penetration. Our conversion rate this quarter was 1.48%, a 31 basis point improvement over last year and a 1 basis point sequentially increase over the fourth quarter of 2009. Orders placed through our e-commerce channel this quarter increased 34% to 423,000 and average order value declined by 0.8% to $119 from last year, both of which reflect consumer trends to in-source in tough economic times. This quarter's customer acquisition costs decreased by $0.27 to $6.13 from last year from more efficient advertising spend. Turning to the balance sheet, quarter-end cash and securities were $45.5 million, an increase of $3.9 million from Q4 2009. We generated $6.8 million of operating cash flow and invested $2.5 million in systems and equipment. Read the rest of this transcript for free on seekingalpha.com