eToys Announces Strong Financial Results for Its
Fiscal Third
Quarter
Business Editors
SANTA MONICA, Calif.--(BUSINESS WIRE)--Jan. 27, 2000--
-- Net sales increased 366% from a year ago to $107 million
-- Cumulative customer accounts almost tripled to 1.7 million
-- Average order size of eToys' domestic business was $67
-- Customer acquisition cost was an efficient $33 per customer
-- Site was 2nd busiest eTail destination during the holidays
eToys Inc. (Nasdaq:ETYS) today announced financial results for
its fiscal third quarter ended Dec. 31, 1999.
Net sales for the quarter were $106.8 million, an increase of
366% over net sales of $22.9 million for the same period in the prior
year, and helped solidify eToys' position as the leading Internet
retailer of children's products.
Excluding non-cash charges for deferred compensation and goodwill
amortization, eToys reported a third quarter loss of $62.5 million, or
$0.52 per share, compared with $8.2 million, or $0.09 per share, a
year ago. The net loss for the third quarter was $75.5 million, or
$0.63 per share, compared with a net loss of $9.8 million, or $0.11
per share, for the same period in the prior year.
In this quarter alone, eToys nearly tripled the number of people
who have made purchases from the company since its Web site was
launched on Oct. 1, 1997. By the end of the quarter, eToys' cumulative
customer accounts reached 1.7 million from 611,000 at Sept. 30, 1999.
Repeat customer purchases represented 34% of orders placed in the
third quarter.
Average order size for eToys' domestic commerce business was $67,
which distinguished the company's performance this quarter and
underscored the inherent strength of its business model. eToys' gross
margin for the quarter was a strong 19%, reflecting the strength of
the company's sales in the absence of such short-term customer
inducements as free shipping and price-off coupons.
Anchored by $25 million in domestic television advertising, the
company's ad spend across all of its business units (including
BabyCenter, Inc. and eToys UK, Ltd.) was $36 million this quarter.
Using the standard calculation of total ad spending divided by new
customers, eToys' customer acquisition cost this quarter was an
efficient $33 per customer.
During the peak months of November and December the company
shipped 96% of its orders on time; in all, 99% of orders placed prior
to the holiday shipping deadline of Dec. 18 arrived in time for
Christmas.
In order to more tightly control its logistics operations and
increase their efficiency, eToys said it is accelerating plans to use
company-run distribution facilities as its primary means of order
fulfillment and decrease its reliance on outsourcing vendors. The
company is currently outfitting an East Coast distribution center in
Danville, Va., which is expected to begin shipping products in the
spring, and is also expanding its existing West Coast distribution
operations in Southern California.
Commenting on the quarter, eToys president and chief executive
officer, Toby Lenk, said: "This was an extremely signifir eToys. Our rapid grow
demonstrated the power of our core business proposition and the eToys'
brand. Overall, our strong traffic, robust sales, solid gross margin
and high average order size exemplify eToys' ledership position in
Internet retailing."
Recent Highlights
Strong industry rankings - According to Media Metrix, eToys was
the second most highly visited eTail site this holiday season.
According to NextCard, eToys was ranked in the top five Web sites in
transaction volume for the six-week holiday shopping period from
Thanksgiving to Christmas. Gomez Advisors Scorecards ranked eToys the
year's top Internet toy store.
Successful international expansion - eToys' U.K. Web site
www.etoys.co.uk was launched on Oct. 20 with four online stores
featuring a wide selection of toys, computer and video games,
educational software and videos. Additionally, on Nov. 8 eToys started
shipping to Canada.
Powerful marketing alliances - In a strategic cross promotion
with GapKids and babyGap, the company aligned itself with one of the
world's best known family-oriented brands and focused on attracting
new customers while rewarding existing best customers with reciprocal
$10 gift certificates for purchases of $75 or more. The company also
launched "Rosie's Readers" program, a creative collaboration between
TV talk-show host Rosie O'Donnell and eToys' online Book Store.
Additionally, eToys participated as a retail partner in the nationwide
McDonald's(R) LEGO(R) Happy Meal(R) Promotion.
About eToys.com
Based in Santa Monica, eToys Inc. (www.eToys.com;
www.eToys.co.uk; AOL Keyword eToys) is the premier Internet retailer
for children's products with an extensive selection of both nationally
advertised and specialty toys, software, books, videos, music, video
games, and baby oriented-products. By combining this extensive
selection, with helpful and fun ideas and award-winning customer
service, eToys offers consumers a unique one-stop source for
children's products. Through its wholly owned subsidiary, BabyCenter,
Inc. (www.babycenter.com), eToys offers Webby-award winning content
and community, as well as an extensive selection of merchandise for
new and expectant parents. |
