Red Envelope misses, re-iterates FY06 guidance (REDE 1Q06 earnings results)

| About: RedEnvelope, Inc. (REDEQ)

Red Envelope (ticker: REDE) reported Q1 2006 earnings results that missed consensus EPS estimates by $0.01. Key stats from the quarter:

Q1 2006 Results
(all percentage changes and comparisons are year on year, unless stated otherwise)

  • Net revenue rose 18.2% to $25.0 million vs consensus estimate of $25.64 million.
  • Gross margin was 53.0% vs 53.2%.
  • Operating expenses rose 23.8% to $15.1 million.
  • Fulfillment expenses were flat at $3.4 million.
  • Marketing expenses rose 38.8% to $6.9 million.
  • G&A expenses rose 25.3% to $4.8 million.
  • Operating loss of $1.8 million vs a loss of $948,000.
  • Net loss of $1.8 million vs a loss of $952,000.
  • Loss per share of $0.20 vs loss of $0.11, and vs consensus loss of $0.19. 

Other Stats

  • Net revenue from existing customers represented 55% of total net revenue.
  • Net revenue per order increased to $80 from $76 in Q1 2005.
  • Gross profit per order increased to $42 from $40 in Q1 2005.
  • Jewelry was the largest product category representing 27% of net revenue.
  • REDE shipped 312,000 orders, an increase of 12% over Q1 2005.

FY 2006 Guidance (re-iterated from last quarter)

  • Revenue growth of at least 20%.
  • Positive net earnings.
  • Capital expenditures of approximately $3.5 million in line with its currently anticipated depreciation expenses for fiscal year 2006.

Balance Sheet

  • Cash and equivalents of $2.2 million and short-term investments of $14.5 million as of July 3, 2005.

REDE chart.


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