Online gift purveyor
saw its fourth-quarter loss narrow on a 15% jump in sales, but the stock fell as the company forecast more red ink in the current fiscal year.
The company, whose embarrassing holiday misjudgments turned the stock into a turnaround play four months after its public debut, lost $2.3 million, or 27 cents a share, on revenue of $17.3 million in the quarter ended March 28, 2004. That compares with a loss of $2.7 million on revenue of $15.1 million in its nonpublic year-ago period.
Analysts surveyed by Thomson First Call were forecasting a loss of 32 cents a share on revenue of $16.8 million in the most recent quarter. The company also forecast fiscal 2005 sales of $93 million to $96 million and a loss of $2.5 million to $3.5 million. Three analysts that follow the stock had been predicting earnings of 2 cents a share on revenue of $93.8 million in the period, on average.
In the fourth quarter, RedEnvelope saw net revenue per order jump to $74 from $67 a year ago, while gross profit per order rose to $39 from $31. Gross margins rise to 53.3% from 46.6% last year and the company trumpeted a 99.9% order accuracy rate on the peak business day before Valentine's Day.
After opening around $13 in October and spending much of late December around $16.50, RedEnvelope shares fell to $11.09 on Jan. 9 when it warned that it would miss estimates because of distribution problems and product shortages. The stock closed at $9.74 Tuesday and was recently down another 15 cents, or 1.5%, to $9.59 on the Instinet late session.
"Fulfillment was a priority for us in the fourth quarter and we continued to enhance processes at the fulfillment center. Product flow through the facility was improved," the company said Tuesday. "The changes we have made at the fulfillment center since the holiday season have assisted us in expediting order turnaround time and improving the accuracy rate for personalization. We look forward to the installation of our new warehouse management solution, which we believe should provide further improvements in our ability to handle heavy order flow."
RedEnvelope put its fiscal 2005 capital expenditures at $3.5 million to $4 million.
"We believe that the investments we are making in marketing and product development should demonstrate results in the third and fourth quarters of fiscal year 2005," the company said. "Consequently, we currently anticipate that our growth will be higher in the second half of fiscal year 2005 than in the first half."