VitaminShoppe.com 1999 Sales Increase, Income Plummets

VitaminShoppe.com 1999 Sales Increase, Income Plummets

NEWYORK--Online vitamin retailer VitaminShoppe.com (NASDAQ:VSHP) reported huge revenueincreases for its fourth quarter and fiscal year ended Dec. 31, 1999. Sales for thequarter soared to $5.6 million, up 319 percent from $1.34 million sold the previous year.Gross margin was 40 percent of sales, while operating expenses rocketed to $21.2 millionfrom $2.6 million the year prior. Net loss widened to $19.2 million or $.94 per share from$2 million lost a year ago. Share amounts were not available for 1998, as the company wentpublic in October 1999.

Revenues for the year also rose sharply, settling at $13.6 million, up 377 percent from$2.9 million sold in 1998. Gross margin was 44.3 percent, and operating expenses swelledto $36.1 million from $4.8 million spent the previous year. Net loss widened to $30.2million or $1.48 per share from $3.4 million lost last year.

"We arepleased with our results," said Jeffrey Horowitz, president and chief executiveofficer. "Our bricks and clicks philosophy, which focuses on providing convenientsolutions for the vitamin user, is working, and our online brand name continues tostrengthen." He noted that 1999 gross margins include the effects of promotionalgiveaways and coupons issued throughout the quarter to reward repeat customers and toattract new customers. During the quarter, the customer base increased 52 percent to100,400, and average order size was $65. "Our direct marketing expertise andstrategic off- and on-line relationships, such as the one recently completed with www.barnesandnoble.com (NASDAQ:BNBN), create costefficient opportunities for us to acquire customers while still preserving ourindustry-leading gross margin." He added that the company raised about $45 million inits initial public offering in October 1999, and it formed a multi-year alliance withAmerica Online.