August 3, 2010, 5:21 PM

Drugstore.com posts higher sales and a net loss in Q2

Sales grew 27.6% to $113.41 million from $88.88 million in the second quarter of 2009.

Mark Brohan

Research Director

Lead Photo

Drugstore.com coupled a net loss with a healthy increase in web sales for its just-concluded second quarter.

 For the quarter ended July 4, Drugstore.com, No. 46 in the Internet Retailer Top 500, reported:

  • Sales grew 27.6% to $113.41 million from $88.88 million in the second quarter of 2009.
  • Net loss was $2.67 million compared with net income of $1.02 million in the prior year.
  • Spending on fulfillment and order processing increased 26.7% to $12.56 million from $9.91 million in the second quarter of 2009.
  • Spending on sales and marketing grew year over year 34.2% to $12.08 million from $9 million.
  • Spending on technology and content increased 15% to $6.97 million from $6.06 million in the in the second quarter of 2009.
  • Total orders were 1.8 million
  • Average net sales per order were $64. Average net sales per order for over-the-counter products and vision were $59 and $120, respectively.
  • Net sales from repeat customers represented 75% of net sales.

“In a softer consumer spending environment, we were pleased to deliver 27% year-over-year revenue growth and strong gross margins of 30.4%,” says CEO Dawn Lepore. “Revenue growth was driven by over-the-counter sales, including solid contributions from our recent acquisition, Salu, which added over $11.5 million. During the quarter, we generated new customer growth of 34%.”

For the first six months of the year, Drugstore.com recorded:

  • Sales grew 25.6% to $224.08 million from $178.40 million in the period of January through June of 2009.
  • Net loss was $5.29 million compared with net income of $1.88 million in the prior year.
  • Spending on fulfillment and order processing increased 22.8% to $24.53 million from $19.99 million in the same period of 2009.
  • Spending on sales and marketing grew year over year 26.2% to $22.99 million from $18.21 million.
  • Spending on technology and content increased 13.4% to $13.58 million from $11.98 million in the period of January through June of 2009.

 For the third quarter, Drugstore.com expects sales to range from $107 million to $111 million and net income to range from $2 million to $3.25 million.

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