This isn’t exactly new news, since its earnings were reported last Wednesday, but it’s a fact worth highlighting these days: Drugstore.com is now effectively a profitable business as it has been able to turn an operating profit for the fourth quarter of 2008, the first time since it went public in 1999.
The company would have gotten there sooner, if it weren’t for the fact that the state of New Jersey settled against the company in a sales tax case, costing the company $2.5 million and resulting in a quarterly loss for Q4 2007, when the company had originally thought it would be turning an operating profit.
The company this week reported quarterly net sales of just south of $94 million and net income of $289,000, and jumped to profitability thanks to an increase in customers (+400,000 new customers in Q4 alone) and solid sales of over-the-counter products. The company achieved fourth quarter gross margins of 28.5% and the highest adjusted EBITDA in the history of the company of $5.2 million, which is up 243% over Q4 2007.
For the year, Drugstore.com reported net sales of $366.6 million, a net loss of $8.3 million and an operating cash flow of $9.9 million for 2008.
Good news always makes me smile. The revenue numbers here are very impressive, especially given the total market saturation of their market by brick and mortar stores.
Proof that the internet works.
I personally dont really care but YAY drugstore!
Good for them. Companies that turn profitable is definitely what we need right now
Is this b/c they bought Beauty.com and thus acquired millions of fashionistas who like to buy perfume, makeup, and nail polish?
Not really. The Beauty.com acquisition was quite some time ago, and has extremely stiff competition from Sephora.
theres a fortune in failure.
Love it.
good to see things are getting better, maybe all of 2009 will be profitable if they can add more customers..
Uh, no this is not proof of anything. Think about all the drugstores around the country. How many of them can sustain operating losses for a decade?
None.
This is the most pathetic excuse for a business ever. All the money spent on this dog and it can’t outperform BRICK AND MORTAR stores? After a f-ing decade?
Give me a break. This is a terrible omen for the web and this category of product sales. Frankly, there is little to be made here. Revenue doesn’t necessarily a business make. Operating profit does. Being EBITDA positive does.
Raising 100s of millions of dollars and having a 10 year runway to prove that you could sell toothpaste online? Jeeez.
If you had opened inumerable nightclubs and restaurants you’d have earned more money this joke.
I say, sell the domain name to a group of Colombian crack dealers for 5M and close the damn thing down.
Being profitable after 10 years as a dotcom really isn’t bad. Dotcom companies have always had a harder time showing profitability because it’s been such a new way to shop and companies needed to do a lot of fiddling to figure out how to make it a viable business model. Companies like drugstore are leading that chase. I remember when everyone thought it was insane to try to get people to buy stuff online, and drugstore.com was around for all of that; they weathered the storm, and have turned into a solid, profitable company. Good for them.
Also, it’s not a “pathetic excuse for a business.” A lot of people feel embarrassed purchasing certain “privacy” items in those brick and mortar stores. drugstore.com makes it a lot more comfortable, since you’re not having to look a cashier in the eye when buying condoms, tampons or adult diapers.
Nice looking margins.
I truly hope they do well. However, 1 profitably quarter out of 10 years of operation does not make it a ‘profitable’ company in my eyes.
In this economy… sweet Jesus!
Wow, first time in ten years. There a “story” on their progression through the years?
How big of a company were they through the entire period? Ten years seems a bit much, nonetheless still noteworthy.
Hmm, do I smell an opportunity for a possible partnership with Beating Addiction (http://www.Beat...ngAddiction.com)?
That seems like a long time to become profitable. I used them once and a week later someone got my CC number and charged a lot on it. It was suspicious since I didn’t use that card very often. So maybe for such a small outfit it did take 10 years to make it while a more established company like CVS could profit in a shorter time period.
Here is our take on this very interesting story http://cli.gs/8UZZDB
Profits won’t last long…their customer service sucks. They don’t stand behind the products they sell and they don’t answer e-mail requests for help.
Gail,
I just had an opportunity to read your comments.
I’m a customer care manager at drugstore.com and I’m very concerned that you had a negative experience with our customer care team. We’re committed to standing behind our products, and we make every effort to respond to emails in a timely and helpful manner.
I would be very happy to speak with you personally regarding any questions or concerns you’ve had with our products or services. If you contact our toll free customer care line at 1-800-drugstore and ask to speak with me (or any other member of our management team) I’m confident we can resolve your concerns and restore your faith in our company.
Greg