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RedEnvelope Beats Estimates

Sales grow 32%.

RedEnvelope undefined, an online retailer of luxury goods, posted earnings that came in above analysts' expectations.

The company reported a profit of $2.8 million, or 30 cents a share, in the quarter ended Dec. 26, up from a profit of $1.2 million, or 13 cents a share in the year-ago period. Sales grew 32% to $47.5 million.

Analysts polled by Thomson First Call had called for a consensus of 26 cents a share and sales of $43.9 million.

Customers are paying more per purchase. Sales per order grew to $87 in the third quarter, up from $79 a year ago, signaling a successful attempt by the company to introduce higher-end goods.

"Our merchandising strategy of designing and sourcing higher-end approachable luxury products contributed to an increase in gross margins to 54.3% this quarter," said CEO Alison May in a statement. "Our gross profit per order was $47, compared to $39 in the third quarter of fiscal 2004."

RedEnvelope's stock has held up during the January selloff of e-commerce and other tech stocks. The stock closed Tuesday trading at $12.71, down 1.6% on the day, but still up 2% in the year so far.

After hours, shares recently rose to $13.50.