Retailers shift their ad spending from TV, radio and print ads to digital ads.
Drugstore.com grew sales 10% year-over-year to $96.9 million for the second quarter of 2005, but still posted a net loss of $4.3 million.
Drugstore.com had second quarter 2005 sales of $96.9 million, up 10% from sales of $87.8 million for the same quarter in 2004. But the company is still looking for sustained profitability. For the second quarter, Drugstore.com, No. 28 in the Internet Retailer Top 400 Guide to Retail Web Sites, reported a net loss of $4.3 million, down from a net loss of $5 million for the second quarter of 2004.
"We reported strong sales in our core over-the-counter and mail-order pharmacy businesses, spurred by continued growth in revenues from repeat customers, average net sales per order and frequency of orders per active customer," says CEO Dawn Lepore. “Moving forward, we believe that increasing the frequency and size of orders from our loyal customer base is fundamental to our growth and achieving long-term profitability."
In the second quarter, Drugstore.com’s total order volume grew by 7% to 1.2 million orders and the number of active new customers grew by 13% to about 1.9 million. But the company is also expecting another loss in the third quarter. For the third quarter of 2005, Drugstore.com expects sales to range from $93 million to $96 million and the net loss range to be from $5 million to $6 million.
"Our net sales range is based on our expectation of continued strong sales growth from our core segments, OTC (excluding wholesale OTC) and mail-order pharmacy,” says Bob Barton, vice president and chief financial officer. “Our net loss and EBITDA loss ranges reflect an increased advertising spend of approximately $4.5 million in the second half of 2005 in support of our brand advertising campaign."