August 19, 2009, 12:00 AM

Q2 revenue at eCost.com declines 12% to $20.3 million

Business-to-consumer revenue rose during the second quarter ended June 30 at eCost.com, but a decline in the e-commerce site’s sales to business customers brought down total revenue by 11.7% year over year to $20.3 million, parent company PFSweb says.

Business-to-consumer revenue rose during the second quarter ended June 30 at online discount retailer eCost.com, but a decline in the e-commerce site’s sales to business customers brought down total revenue by 11.7% to $20.3 million from $23 million a year earlier, parent company PFSweb Inc. says.

The company did not specify how much the b2c side grew, but noted that eCost’s consumer business accounted for 55% of its Q2 revenue. ECost is No. 128 in the Internet Retailer Top 500 Guide.

In its Q2 financial statement and conference call, PFSweb also reports:

  • Adjusted EBITDA for eCost.com, or earnings before costs related to interest, taxes, depreciation and amortization, was a loss of $400,000, a 33% improvement from a loss of $600,000 in the year ago period.
  • ECost acquired 49,192 new customers, a rise of 67% from the 29,456 new customers acquired in the year-ago period, as its number of active customers rose 30% to more than 222,000.
  • Cost of acquiring new eCost customers in Q2 was an estimated $4.44, down from $5.69 a year ago.
  • The number of product SKUs available on eCost.com rose 76% to 300,000 as the site expanded product categories including sports and leisure.
  • Total revenue for PFSweb, which also includes fulfillment and call center services, fell 26% to $82.3 million from $110.7 million.
  • Total Q2 net loss for PFSweb was $2.5 million, compared to year-ago net income of $100,000.
Mark Layton, chairman and CEO of PFSweb, notes that eCost was able to counteract some effects of the economic downturn by increasing by 500% its number of loyalty club members, who make online purchases three times more frequently than non-members. Club members receive twice-weekly promotions.

For the six months ended June 30, the company reports:
  • ECost revenue declined 19.2% year over year to $41.2 million from $51 million.
  • ECost’s adjusted EBITDA narrowed to $800,000 from $1.2 million a year ago.
  • Total revenue for PFSweb was $171.3 million, down 25% from $229.2 million a year ago.
  • PFSweb had a total net loss for the first half of $2.8 million, compared to year-ago net income of $500,000.

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