Financial Reports: RedEnvelope, Blue Nile, IAC, Overstock.com

Net Loss Widens at Red Envelope

While net revenue for Red Envelope (Nasdaq: REDE) increased 18%, the San Francisco-based gifts cataloger’s net loss widened. For the first quarter ended July 3, the marketer’s net revenue was $25.0 million, compared to $21.1 million for the period last year. Its net loss for the quarter was $1.8 million, compared to a net loss of $952,000 last year.

“While our net loss was greater than for the first quarter of fiscal 2005, it met our expectations as we invested in brand building advertising this quarter, and are now fully staffed compared to the first quarter of last fiscal year, having filled a number of key positions in areas such as marketing, information technology and product development,” said RedEnvelope’s president/CEO Alison May, in a statement.

Fulfillment expense as a percentage of revenue declined from 16.1% to 13.6%, with fulfillment accuracy rate was just over 99.9%. “We were able to handle our 18% revenue growth with essentially no growth in our fulfillment expenses,” May said.

In the release, the company said its catalog performed below expectations but its online channel exceeded expectations. RedEnvelope said it made changes on the catalog’s assortment and product density based on customer feedback and marketing analysis.

Blue Nile Sparkles During Quarter

Seatte-based online purveyor of diamonds and jewelry Blue Nile (Nasdaq: NILE) reported a 25% net sales increase to $43.8 million for the quarter ended July 3, compared to net sales of $35.0 million in the second quarter of 2004. Net income in the second quarter increased 50% to $2.8 million, from $1.9 million in the prior year.

Cornerstone Brands Propels IAC Retail Sector

The acquisition of multititle cataloger Cornerstone Brands this past April—gave a boost to the retail sector of media and marketing services conglomerate New York-based IAC/InterActiveCorp (Nasdaq: IACI).

Total revenue for IAC, which includes Expedia, Ticketmaster, and Lending Tree, increased 33% to $2.0 billion for the quarter ended June 30, compared with $1.5 billion last year. Total net income surged to $618.1 million, compared with $69.9 million. Results reflected the selling off of several large assets–including German television broadcaster Euvia Media and Vivendi Universal Entertainment—which brought in $401.7 million in after-tax gains.

In the retailing sector — which in addition to Cornerstone Brands includes the HSN shopping channel and catalogs—revenue increased 47% to $761.6 million for the quarter, compared with $517.5 million last year. Operating income for the retailing segment increased 40% to $58.7 million, compared with $42.0 million last year.

During the quarter, the retail sector mailed 109.3 million catalogs, compared 16.8 million catalogs last year. What’s more, the company reported 12.6 million units shipped, compared with 9.5 million units shipped last year.

Direct Sales Surge at Overstock.com

Salt Lake City-based Overstock.com (Nasdaq: OSTK) reported a 72% increase in revenue. The online closeouts retailer’s revenue hit $150.6 million for the quarter ended June 30, compared with $87.8 million in 2004. Direct sales increased 46% to $60.1 million, compared with $41.1 million last year. Overstock.com reported net loss of $2.5 million, compared to a net loss of $2.3 million last year.