RedEnvelope’s annual net revenue rises 13% as net loss narrows

Online and catalog gifts retailer RedEnvelope Inc. posted $79.3 million in net revenues for the fiscal year ended March 28, an increase of 13.3% from $70 million the prior year, as its net loss narrowed 33.8%, to $5.1 million from $7.7 million, the company reported.

CEO Alison May attributed the improved performance partly to more effective fulfillment operations that led to a near-perfect order accuracy rate of 99.9% on Mother’s Day and Valentine’s Day and strong demand for such everyday gift categories as children’s and men’s accessories. Although children’s and men’s accessories are the retailer’s fastest-growing categories, jewelry remains RedEnvelope’s largest category, accounting for 26% of total revenues in the fiscal fourth quarter.

"Fulfillment was a priority for us in the fourth quarter and we continued to enhance processes at the fulfillment center," May said. "The changes we have made at the fulfillment center since the holiday season have assisted us in expediting order turnaround time and improving the accuracy rate for personalization" of orders. Fulfillment expenses for the fiscal year rose 13.3%, to $12.2 million from $10.8 million in the prior year.

Financial performance improved further in the fourth quarter, when net revenues rose 14.7% to $17.3 million from $15.1 million, as net loss narrowed 14.8% to $2.3 million from $2.7 million, the company said. Q4 net revenue per order increased to $74 from $67, as gross profit per order increased to $39 from $31.

RedEnvelope said it anticipates its net revenues for the fiscal year ending in March 2005 will be within a range of approximately $93 million to $96 million.