FOCUS-EToys quarterly sales surge but losses widen
Reuters Story - July 27, 1999 21:16
PALO ALTO, Calif., July 27 (Reuters) - Online toy seller eToys Inc. said on Tuesday that its June 30 first-quarter losses grew despite a surge in sales from the year-ago quarter.
Excluding a non-cash charge for deferred compensation and amortization, Santa Monica, Calif.-based eToys had a loss of 17 cents a share, said Chief Financial Officer Steve Schoch. That was in the range of 17 to 19 cents analysts were forecasting for the loss before the charge, he added.
According to data from First Call Corp, Wall Street had expected the company to lose 19 cents per share, before the charges.
Including the charges, eToys showed a loss of $20.8 million, or 21 cents per share, for the first quarter ended June 30, compared with a loss of $2.2 million, or 4 cents, a year ago.
EToys -- which also sells children's books -- said repeat customers accounted for more than 40 percent of sales, and customer accounts rose 28 percent from the prior quarter.
The company said it had sales of nearly $8 million, up from $381,000 in the year-ago period. Sales rose 32 percent from the preceding quarter, eToys said.
"We were quite pleased" with the results, Schoch said in an interview.
The earnings report was the company's first since going public in May, when it sold 9.6 million shares at $20 each in an initial public offering. The stock surged as high as $85 during its first day of trading on May 20.
Since then, amid a downturn in Internet stocks, the stock has dropped. Shares dipped to $38.75 in after-hours trading on Tuesday. It rose $2.66 to $39.28 on the Nasdaq before results were released after the close of trading.
Founded by former Walt Disney Co. executive Tobi Lenke, eToys also faces mounting competitive pressure from online retailing giant Amazon.com Inc., which recently started selling toys online.
Toys "R" Us Inc.TOY.N has already formed an Internet venture, and Wal-Mart Stores Inc.WMT.N, the world's largest retailer, may come up with its own Internet toy offering by the fourth quarter.
Forrester Research expects sales online sales of toys to reach $1.5 billion by 2003, accounting for about 5 percent of all toy sales.
Schoch said he wasn't deterred. "There's really no other competition out there that's both kid and Internet focused," Schoch said. "And that will enable us to do things to provide the best shopping experience for children's products."
Earlier this month, eToys completed its acquisition of BabyCenter Inc., a Web site for new or expecting parents that also features baby products and supplies for sale online.
The U.S. toy market is estimated at $23 billion. |
