August 27, 2008, 12:00 AM

Revenue slides 15% in Q2 for eCost.com

Web merchant eCost.com reported sales of $23 million for the Q2 of 2008, down by about 15% from the same period in 2007. Despite the numbers, the company expects new web stores and site upgrades to boost full-year sales.

Mark Brohan

Research Director

Mass merchant eCost.com reported sales of $23 million for the second quarter of 2008, down by about 15% compared with $27.1 million for the same period in 2007. Despite the decrease in quarterly revenue, the company expects new web stores and site upgrades to boost full-year sales. The company attributes the sales fall-off mainly to a decline in its b2b sales during the second quarter, ended June 30, 2008.

ECost.com’s operating loss remained flat for Q2 vs. Q1, at about $600,000. The company is No. 119 in the Internet Retailer Top 500 Guide.

For the first six months of fiscal 2008, eCost.com’s revenue picture was brighter. Sales were $51 million, up by 4.7% compared with $48.7 million for the same period in 2007.

“Considering the macroeconomic forces pressuring the entire U.S. retail industry, we believe the overall health of eCost.com continues to improve due to the enhancements we have made to the site and underlying business,” says Mark Layton, chairman and CEO of PFSweb Inc., eCost.com’s parent. “During the quarter, eCost.com experienced a softening in its business-to-business segment, and its business-to-consumer segment was relatively flat compared to last year. We improved our gross profit margin through implementation of new and more sophisticated automated pricing tools and from a growing mix of higher margin product sales, including our new ‘For the Home’ and ‘Sports and Leisure’ stores, especially in our business to consumer segment, and we continue to focus increased efforts here. We remain confident our continued emphasis on making site enhancements, introducing new products and focus on achieving higher gross margins will help us in our goal to achieve cash flow break-even at eCost.com.”

PFSweb reported revenue of $110.7 million, up by 2.1% compared to $108.4 million for the second quarter of 2007, and net income for Q2 of $62,000, compared with net income of $154,000 in Q1 2007.

For the first six months of fiscal 2008, PFSweb reported total sales of $229.2 million, up by 7.7% vs. $212.8 million for the six months ended June 30, 2007. Net income was $476,000 in the 2008 period, compared with a net loss of $2.2 million for the first half of fiscal 2007.

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