With strong growth across both pharmacy and general merchandise sales, Drugstore.com`s 2004 net sales grew 47% year-over-year to $360.1 million, but free shipping and marketing costs widened its net loss 156%, the company said today.
With strong growth across both pharmacy and general merchandise sales, Drugstore.com Inc.`s 2004 net sales grew 47% year-over-year to $360.1 million from $245.7 million, but free shipping and marketing costs widened its net loss 156%, to $47.7 million from $18.6 million, the company said today.
“Many of our key metrics -- revenues, customer growth, order volumes, and basket sizes -- are showing robust growth," said CEO and chairman Dawn Lepore. "These results underscore both strong and sustained consumer demand.”
Fourth-quarter net sales rose 46.8% to $103.6 million, up from $70.6 million in the year-ago quarter. Q4 pharmacy sales grew 41% year-to-year while general merchandise sales rose 28%, the company said. Q4 net loss widened 119.8% to $5.36 million from $2.44 million a year ago. Its Q4 and fiscal year ended Jan. 2.
Gross profit margins declined due partly to increased fulfillment and marketing costs, including the free 3-day shipping policy implemented last year, and a higher percentage of low-margin products sold in Q4, the company said. While the full-year gross margin dipped only slightly to 20.3% from 20.4% in 2003, the Q4 margin two percentage points to 20.2% from 22.2% a year ago.
Nonetheless, Drugstore said it realized 34% year-to-year growth in Q4 gross profit dollars to $20.98 million from $15.66 million and 45.8% growth in full-year gross profit dollars to $73.24 million from $50.23 million in 2003.
For its 2005 fiscal year, Drugstore said it’s targeting net sales in the range of $400 million to $420 million, or more than 10% over 2004.