Economy Hurts Online Jewelry Retailer Bidz.com

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Bidz.com reported Monday that its fourth quarter net income fell by nearly two thirds on sharply lower sales, but the online jewelry retailer still met Wall Street profit expectations.

After the market closed, the Culver City-based company reported net income of $2.9 million (13 cents per share), compared with net income of $8.2 million (29 cents) a year ago. Net revenue fell 44 percent to $35.1 million. The consensus of analysts surveyed by Thompson First Call expected net income of 13 cents per share on revenue of $48.1 million.

The company noted that because it did not promote significantly or use heavy discounting, it was able to largely maintain profit margins. Its gross margin in the quarter was 34.4 percent, compared with 31.2 percent in the same period of 2007.

For the full year 2008, net income fell 20 percent to $14.4 million, with net revenue up 11 percent to 207 million.

“While the retail spending environment remains exceedingly difficult and we expect will continue to be so through 2009, we believe that our focus on profitability and gross margins combined with our ongoing cost cutting initiatives, will allow us to remain profitable and financially strong while increasing our market share in the global jewelry market,” said President Leon Kuperman in a statement.

The company expects to record first quarter revenue of between $30 million and $32 million.

Before the earnings announcement, Bidz.com shares closed up 18 cents, or 6 percent, to $3.21 on the Nasdaq.

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