eToys' losses grow, sales surge
"Marketing expenses in its fiscal third quarter will be a third higher than the company initially forecast to capitalize on the holiday season, chief financial officer Steven Schoch said on a conference call."
Didn't Amazon say the same thing yesterday? The stock got pounded today.
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eToys' losses grow, sales surge
By Bloomberg News
Special to CNET News.com
October 28, 1999, 4:15 p.m. PT
SANTA MONICA, California--eToys, the No. 1 Internet toy retailer, said its fiscal second-quarter loss widened, while sales surged, as the company promoted its site and added new features ahead of the holiday shopping season.
eToys' loss was $44.9 million, or 38 cents a share, compared with $3.38 million, or 4 cents, a year earlier. Revenue jumped to $13.3 million from $608,000 for the period ended September 30. That exceeded the $10 million estimate of analyst Lauren Cooks Levitan of BancBoston Robertson Stephens and the $11.1 million estimate of Ryan Alexander of Wit Capital Group.
The quarter is a small one for eToys. The company gets about two-thirds of its sales from October to December, which include the holiday season. Last December, holiday traffic helped make eToys the fifth-most visited Internet shopping site, according to Media Metrix. It faces more rivals this year, including No. 1 online retailer Amazon.com, which added toys in July.
eToys will make "additional, discretionary investments to heighten brand awareness, to further leverage customer-focused technology, and to advance our geographic expansion," chief executive Toby Lenk said in a statement.
Marketing expenses in its fiscal third quarter will be a third higher than the company initially forecast to capitalize on the holiday season, chief financial officer Steven Schoch said on a conference call.
The company's second-quarter loss excluding costs related to deferred compensation and amortization widened to $32.1 million, or 27 cents a share, from $3.23 million, or 4 cents, a year ago. On that basis, eToys was expected to lose 28 cents, the average estimate of nine analysts polled by First Call.
Customer growth
Santa Monica, California-based eToys--which also sells software, videos, music, and games--had its initial public offering in May at $20 a share. In July, the company bought BabyCenter, which offers baby products and pregnancy information online, and added a children's bookstore.
The number of customer accounts at the eToys site and the BabyCenter subsidiary rose to 611,000 at the end of the quarter, a 31 percent increase from 467,000 on June 30.
Last month, eToys unveiled a national television advertising campaign to help promote its site for the holidays. It also introduced a new area on its site that lets consumers read about subjects related to the products it sells.
eToys, which last week opened an online store in the United Kingdom, said it will begin shipping merchandise to Canada next week and plans to open a store in at least one more European market next year.
news.cnet.com
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