Expenses were expected to increase during the current year, so the reality comes as no surprise. The company added numerous buyers to keep pace with rapid sales growth, added staff and facilities to handle inventory (great job so far, huh!!), drastically increased spending on advertising to draw traffic and mindshare......they went from a standing start to full speed in less than a year. As you stated in an earlier post, ONSL is now staffed at reasonable levels, therefore, I would not expect costs to increase at the same pace they had in the past. That's the whole concept of scalability. Notice that advertising spending seems to be decreasing rapidly...at least I haven't seen many banner ads on Yahoo lately. Will that affect revenue growth?
As to the analysts - so far during the past 12 months, the analysts have been wrong every time - they overestimated ONSL's loss. Onsale has managed to beat the estimates every time. If the analysts models are wrong, the way you say, ONSL is even better than I thought. |
