RedEnvelope Sales, Income Up Despite Ops Woes
Despite sourcing and fulfillment snafus, San Francisco-based gifts cataloger RedEnvelope (Nasdaq: REDE) managed to post a slight increase in its quarterly net revenue and income.
For the three months ended Dec. 28, sales were $35.9 million, up 5% from $34.3 million for the comparable quarter of the previous year. Net income increased 33%, to $1.2 million from $900,000.
“We purchased our inventory conservatively,” president/CEO Alison May said in a statement. “This resulted in us not being able to meet all of the demand for our products. In most cases, we initiated outbound calls to customers to let them know that the products they ordered were unavailable and, inevitably, this led to some cancellations.”
Amazon Books Its First Annual Profit
Thanks in part to free-shipping offers and low prices ($29 DVDs!), Seattle-based Internet behemoth Amazon.com (NasdaqNM: AMZN) generated a 36% increase in fourth-quarter sales, to $1.95 billion from $1.43 billion in 2002. Sales for year ended Dec. 31 increased 34%, to $5.26 billion from $3.93 billion the previous year.
Net income for the quarter skyrocketed to $73.2 million, up from $2.7 million. What’s more, Amazon posted its first full-year profit. It reported net income of $35 million, compared with a $149 million loss for 2002.
During fourth-quarter 2003, Amazon saw its costs of sales rise to 78.1% of total sales, up from 76.5% in fourth-quarter 2002. Its cost of sales increased for the entire year as well, rising from 74.8% in 2002 to 76.1% in 2003.
But the online superstore also controlled its operating expenses, which dropped from 18.5% of its total sales in fourth-quarter 2002 to 14.9% for the fourth quarter of 2003, and from 23.6% for 2002 to 18.7% for 2003. Specifically, its fulfillment, marketing, technology, and administrative costs did not rise as quickly as its revenue.