Costs Contribute to RedEnvelope Losses
RedEnvelope Inc. posted a net loss of $4.3 million for the third quarter, compared to net income of $5.3 million in the prior year.
The giftware direct marketer reported net revenue of $45.2 million for the quarter ended Dec. 30, a drop from net revenue of $57.0 million last year,
Specifically, the San Francisco company said it experienced a decrease in net revenue per order to $91 from approximately $93 in the prior year. Also, gross profit per order decreased to approximately $44 compared to $50 in the prior year.
In addition, approximately 495,000 orders shipped during the quarter, a decrease of approximately 20% from the same period of the prior year. The company attributed this primarily to a decline in customer response rates and a reduction in marketing expenditures for new customer prospecting in the second half of fiscal 2007.
Red Envelope reported gross profit margin of about 48.7% in the third quarter of fiscal 2008, compared to 54.1% the last year, primarily due to the ongoing shift in merchandising strategy and product mix.
Marketing expenses in the quarter were $13.5 million, or 29.8% of net revenues, compared to $12.6 million, or 22.1% of net revenue in the prior year. The firm attributed this to higher catalog production and postage costs, and increased public relations activities.
