February 10, 2010, 12:00 AM

Drugstore.com finished Q4 with higher sales and a net loss

Sales jumped 25% in the final quarter for Drugstore.com, but costs related to its pending acquisition of Skinstore.com resulted in a net loss of $1.6 million. Sales for the year increased 12.6%.

Drugstore.com finished 2009 with a strong uptick in sales, but costs related to its pending acquisition of Skinstore.com resulted in a net loss for the fourth quarter.

For the quarter ended Jan. 3, Drugstore, No. 48 in the Internet Retailer Top 500 Guide (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name), reported:

  • Sales increased about 25.6% to $117.4 million from $93.4 million in the fourth quarter of 2008. Sales for the web-only retailer’s over-the-counter unit increased 31.9% to $92.1 million from $69.8 million, while sales for its contact lens and vision-related business grew year over year 13.0% to $16.5 million from $14.6 million. Revenue for the mail-order pharmacy business decreased 8.3% to $8.8 million from $9.6 million.
  • Net loss was $1.6 million compared with net income of $289,000 in the fourth quarter of 2008. Drugstore.com said $1.4 million in costs related to its pending acquisition of Drugstore, No. 220 in the Internet Retailer Top 500 Guide, accounted for much of the loss. Drugstore.com also accumulated about $200,000 in expenses related to its new contact lens retailing deal with Luxottica Group S.p.A. Drugstore.com in December agreed to acquire Salu Inc., owner and operator of online beauty retailer SkinStore.com, in a stock-and-cash deal valued at $36 million. The deal is expected to close in March.
  • Spending on fulfillment and order processing increased 21.9% to $12.8 million from $10.5 million. Fulfillment expenses accounted for 10.9% of total revenue.
  • Spending on marketing and sales grew year over year 19.8% to $10.9 million from $9.1 million. Marketing expenses accounted for 9.3% of total revenue.
  • Spending on technology and content increased 10% to $6.6 million from $6.0 million. Technology expenses accounted for 5.6% of total revenue.
  • Average order was $66 compared with $67 in the fourth quarter of 2008.

“Our growth was driven by strong performance from our core business, including our beauty business on Drugstore.com and Beauty.com, along with growing contributions from our partnerships,” says CEO Dawn Lepore.

 

For the full year, Drugstore.com also reported:

  • Sales increased 12.6% to $412.8 million from $366.6 million in 2008. Sales for the over-the-counter unit increased 17.7% to $306.9 million from $260.8 million, while sales for the contacts and vision-related business grew year over year by 11.9% to $68.7 million from $61.4 million. Revenue for the mail-order pharmacy business decreased 16% to $37.3 million from $44.4 million.
  • Net loss was $1.4 million compared with a net loss of $8.3 million in 2008.
  • Spending on fulfillment and order processing increased 5.5% to $45.8 million from $43.4 million. Fulfillment expenses accounted for 11.1% of total revenue.
  • Spending on marketing and sales grew year over year 13.6% to $38.2 million from $33.6 million. Marketing expenses accounted for 9.3% of total revenue.
  • Spending on technology and content increased 8.3% to $24.9 million from $23.0 million. Technology expenses accounted for 6.0% of total revenue.

In the first quarter, Drugstore.com expects sales to range from $117.0 million to $121.0 million and the net loss from $2.4 million to $3.5 million.

 

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