Drugstore.com beats consensus EPS estimates; stock whacked on weak guidance (DSCM 2Q05 earnings results)

Drugstore.com (ticker: DSCM) reported Q2 2005 earnings results that beat consensus EPS estimates by $0.02. Key stats:

Q2 Results
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Revenue rose 10.3% to $96.9 million slightly below consensus of $98.08 million.
• Gross margin was 20.5% versus 20.0%.
• Total operating expenses rose 8.4% to $24.5 million.
• Fulfillment and order processing expenses fell 2.0% to $9.4 million.
• Sales and marketing expenses rose 10.8% to $7.0 million.
• Technology and content expenses rose 46.6% to $3.0 million.
• G&A expenses rose 15.7% to $3.9 million.
• Operating loss was $4.6 million versus a loss of $5.0 million.
• Net loss was $4.3 million versus a loss of $5.0 million.
• Diluted loss per share of $0.05 versus a loss of $0.07, and versus consensus loss of $0.07.

Balance Sheet

• Cash and equivalents of $19.2 million as of July 3, 2005.

Q3 Guidance

• Net sales of $93.0 - $96.0 million, versus consensus of $101.0 million.
• EBITDA loss of $5.0 - $6.0 million.
• Net loss of $7.5 - $8.5 million.
• Losses expected from increased advertising spend of approximately $4.5 million in 2H 2005.

DSCM chart.

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