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  • investora2z investora2z Nov 30, 2013 6:20 AM Flag


    The earnings were again below estimates and the sell off was sharp. It is difficult to recover quickly from such a huge fall. The volumes were also extremely high. It has bounced a bit, but the volumes are going down. The losses declined sequentially and on a yoy basis. The revenues increased on a yoy basis, but there was a sequential decline. The net loss was $0.11 per share slightly below estimates, and the revenues were $90.5 million compared to the consensus estimate of $97.88 million. It added lesser customers in the quarter, but the total active customers grew 6% to 2.1 million. The ttm revenues are now around $370 million and the net loss is $14.11 million. In the full year 2012, the revenues were $330 million and the net loss was $19 million. For the nine months of the year, the net sales was $285 million compared to $245 million in the same period in 2012. The net loss also declined from $15.9 million to $10.9 million for the nine months of 2012 and 2013 respectively. So there have been improvements in the margins, but the company remains far from a net profit. The next few quarters will indicate whether it will be able to make decisive moves towards profitability. Cash and equivalents have also declined from $32 million on December 31, 2012 to $19.23 million on September 30. The inventory levels are also relatively high. Third party products comprised 75% of the sales, while proprietary products contributed around 20%. The supplements / wellness market is expected to grow at a good pace, and Vitacost can take advantage of the growth. The growth potential is evident from the success of companies like MusclePharm (MSLP) which has moved from near zero to $100 million in a few years. However, online retail is highly competitive, and it is difficult to achieve profitability. Vitacost surely needs to do better in the next few quarters to improve the sentiments.