Etsy assembles loss in Q2
Brooklyn, N.Y. – Etsy Inc. assembled a growing net loss in the second quarter of fiscal 2015, despite improving sales results. Net loss doubled to $6.4 million from $3.2 million in the second quarter a year earlier.
Higher operating expenses and taxes were largely responsible for Etsy’s net loss, offsetting a favorable currency exchange gain. Revenue fared much better, rising 44% to $61.36 million from $42.5 million. Marketplace revenue grew 23% to $30.47 million from $24.78 million, while seller services revenue skyrocketed 80% to $29.77 million from $16.59 million. Mobile visits increased from 53% to 60%, and the percentage of gross merchandise sales attributable to mobile grew to 43% from 36%.
“We succeed when our sellers succeed, and we believe our reputation as an authentic, trusted marketplace is the foundation for the long-term value we expect to create for our entire community, including our investors, for decades to come,” said Chad Dickerson, Etsy, Inc. CEO and chairman.
Lumber Liquidators posts Q2 loss; may face formaldehyde action
Toano, Va. – Legal and regulatory costs, as well as costs related to payroll, severance and commissions, contributed to a surprise net loss during the second quarter of fiscal 2015 at Lumber Liquidators. The struggling retailer also informed financial regulators that it may face legal action stemming from the sale of Chinese hardwood flooring that allegedly contained excessive levels of formaldehyde.
Net loss was $20.3 million, compared to net income of $16.6 million the same quarter a year earlier. Net sales were $247.9 million, a 6% decrease from $263.1 million. This figure included a same- store decline of 10%, due to decreases in the number of customers invoiced and the average sale. Lumber Liquidators believes net sales were negatively impacted by allegations of unsafe formaldehyde levels in Chinese flooring products, as well as its decision to suspend sales of those items.
Lumber Liquidators said the California Air Resources Board (CARB) informed it that preliminary tests of Chinese hardwood flooring product samples showed dangerously high levels of formaldehyde, which is a known carcinogen. The investigation is ongoing and CARB may file a claim, though no formal violation notice has been issued.
Since “60 Minutes” first ran an expose alleging dangerously high levels of formaldehyde in Chinese hardwood products sold at Lumber Liquidators in March, the company has seen share value fall, reported a first quarter net loss, and its CEO and chief compliance officer both quit. The company also eliminated its chief merchandising officer position.
Despite these issues, the retailer anticipates opening 20 to 25 new store locations in the expanded showroom format, as well as the remodeling of a total of 10 to 15 existing stores in the expanded showroom format, by the end of the fiscal year.
“Our results this quarter reflect the impact of challenges the Company has faced, particularly over the last several months,” said Thomas D. Sullivan, founder and acting CEO. “Our team is committed to leveraging and investing in our robust infrastructure, our strong brand and our long-term customer relationships. We believe that if we stay focused and do the simple things right, we can grow our business by re-establishing a solid foundation for our loyal customers, employees and shareholders."
Study: The online journey begins in the marketplace
Seattle – Consumers are partial to online marketplaces when it comes to choosing a starting point for digital shopping journeys. According to a new research study from Amazon.com and Pymnts.com titled “Innovation and the Digital Shopper,” 64% of respondents begin their shopping journey on online marketplaces.
In comparison, 48% of respondents begin their online shopping journey on merchant websites, 40% on search and 25% on social media. Respondents ranked trust as the number one factor on whether they chose to complete an online purchase
Furthermore, respondents are two times more comfortable using a new payment product online or on mobile from Amazon than from Apple. They are also 2.5 times more comfortable with a new digital payment product from Amazon than from Google and 10 times more than from Facebook and Pinterest.
“The number one determining factor on whether a consumer chose to make a purchase online was trust, not selection or price, but trust,” said Patrick Gauthier, VP of Amazon payments. “Trust is paramount to digital shoppers and it’s evident at every stage of the shopping journey.”