RedEnvelope’s Q3 net income rises 33%
Online and catalog gifts retailer RedEnvelope posted net income of $1.2 million for the third quarter ended Dec. 28, up 33% from $900,000 in the year-ago quarter, while Q3 revenue rose 4.6% to $35.9 million from $34.3 million, the company said.
For the first nine months of its 2004 fiscal year, RedEnvelope reported net revenue of $62 million, up 12.9% from $54.9 million in the same period a year earlier. At the same time, it posted a narrowing of its net loss to $2.9 million from $5.1 million, an improvement of 37%.
CEO Alison May said the Q3 increases in revenue and net income were partly due to an expanded assortment of proprietary products, though she said the expanded product line also led to some order cancellations due to sourcing difficulties. "This was a mixed blessing for the quarter, as we purchased our inventory conservatively and experienced sourcing issues with some of our products," she said. "This resulted in us not being able to meet all of the demand for our products. In most cases, we initiated outbound calls to customers to let them know that the products they ordered were unavailable, and inevitably, this led to some cancellations. But, the customer response also gives us confidence that RedEnvelope continues to be a premium destination for shoppers looking for unique gifts."
May added that RedEnvelope is addressing distribution difficulties encountered during the recent holiday season with improvements to its distribution center.
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