RedEnvelope says yearly revenue will grow 67% this FY

San Francisco-based RedEnvelope Inc. said today it expects its fiscal year revenue to increase 67% to $50 million. RedEnvelope’s FY ends March 31. The company also reported that it reached profitability in the third quarter, which ended Dec. 31. The company says it is on track to be profitable in its next FY.

"After a sluggish November, RedEnvelope experienced extraordinary post-Thanksgiving sales momentum, which resulted in two million-dollar days in December,” said Martin McClanan, CEO. “This strong consumer demand came with minimal discounting, contrary to the industry trend of promotions this holiday season."

December traffic to RedEnvelope.com increased 30% to 3 million visits. Average ticket was $80.

RedEnvelope, which started life as a pure-play Internet retailer in the fall of 1999, added a catalog in 2000. It reports that the catalog today drives half the company’s revenue. The company continued to invest in its catalog last year, creating a larger format, including more products and increasing circulation to 6 million.

"Our third holiday season in business surpassed our expectations in many areas," said Hilary Billings, chairman and chief marketing officer. "We were very happy with the strong demand for RedEnvelope proprietary products, reinforcing our merchandising team`s ability to identify both fashion trends and classics in all product categories. In addition, we achieved tremendous growth in our existing and new customer base, as we broadened the reach of our catalogs and expanded our product line to create a shopping experience that is inspired, modern, and approachable."

Profits for the quarter were achieved on an EBITDA basis, the company says. Gross margins were better than 50%, the company said.