RedEnvelope Sees Income Up Despite Inventory Problems
The San Francisco company posted total net revenues of $35.9 million during the third quarter that ended Dec. 28, compared to $34.3 million in the third quarter of the prior fiscal year. Net income totaled $1.2 million compared to $900,000 in the third quarter of fiscal 2003.
RedEnvelope president/CEO Alison May, RedEnvelope cited "sourcing issues with some of our products" while commenting on the quarter in a statement. "We purchased our inventory conservatively. This resulted in us not being able to meet all of the demand for our products. In most cases, we initiated outbound calls to customers to let them know that the products they ordered were unavailable and, inevitably, this led to some cancellations."
May also mentioned problems at the distribution center during the holiday season that resulted in not fulfilling some products, including personalized gifts. RedEnvelope said it shipped 453,000 orders in the third quarter.
At the end of the third quarter, RedEnvelope's customer file had 1.7 million names.