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Loss Deepens at eToys
Editor in Chief
eToys says its loss for the fourth quarter ended March 31 widened considerably to $36.6 million, or 30 cents per share, compared with $8.9 million, or 10 cents per share, last year. The company attributed the growing gap to added promotional costs and its transition to inhouse fulfillment. It says it expects losses to dip significantly as a percentage of sales this year.
For FY2000, eToys lost $148.1 million, or $1.29 per share, compared with $22.4 million, or 27 cents per share, a year ago. Both net sales and customer accounts grew fivefold during the year, however. Sales reached $151 million versus $30 million in FY1999, while cumulative customer accounts grew to 1.9 million from 365,000.
Net sales for the fourth quarter amounted to $23 million, up nearly fourfold from $6.1 million recording during the same period in FY1999. Also during the period, eToys added 226,800 new customers at a cost of $24 per customer, a significant decrease from both the holiday quarter and the year-ago period. Repeat customer purchases represented 49% of orders placed in the quarter. "With our current cash reserves and significant operating flexibility, the company believes it is adequately financed to achieve its growth objectives into 2001," says Steve Schoch, eToys' senior vice president and chief financial officer. "At the same time, we are actively exploring opportunities to finance the company's growth until it achieves profitability."
On the fulfillment end, eToys has leased a 763,000-square-foot facility in Ontario, Calif., that will anchor its West Coast operations. The company is boosting its East Coast fulfillment operations with a 715,000-square-foot warehouse adjacent to its existing 440,000-square-foot facility in Danville, Va., and leased a 280,000-square-foot facility in nearby Chimney Rock, N.C. EToys says it expects these operations to meet its fulfillment needs for at least the next two holiday seasons.