RedEnvelope’s online sales for the third quarter ended Dec. 28 rose about 42% year-over-year, compared to less than 5% growth in total revenues. But even online sales were less than expected, CEO Alison May said.
"While our third-quarter online business, which includes sales generated through portals, search, and affiliates, grew approximately 42% year over year, these results were below our expectations," May said.
RedEnvelope also said that Q3 retail catalog sales remained about the same as in the year-ago quarter, even though RedEnvelope shipped 20% fewer catalog pieces, May added.
The retailer said it expects Q3 total revenue to be within a range of $35 million to $35.7 million, with net income of $900,000 to $1.2 million, compared to year-ago revenue of $34.3 million and net income of $900,000.
RedEnvelope also sales through direct corporate sales and through television. "Our corporate sales channel did not develop as quickly as we had planned," May said.
May said RedEnvelope also lost revenue due to stock-outs of some new proprietary products and due to canceled orders resulting from distribution problems. "Additionally, we expect shipping revenues to be lower than expected due to promotional shipping offers and lower product sales for the quarter," May said.
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