Feeds

eToys warns on revenues

Xmas shoppers not flocking to site

  • alert
  • submit to reddit

The essential guide to IT transformation

eToys has warned that it won't be filling as many Christmas stockings as previously thought.

The Los Angeles-based e-tailer said late on Friday that orders for the current quarter were less than expected, forcing it to halve Q3 revenue forecasts. It now expects net sales of between $120 million and $130 million, down from the $210 million to $240 million it had expected. This compares to $106 million for the Christmas quarter 1999.

Losses are also expected to rise - eToys had pitched losses at between 22 per cent to 24 per cent of revenue, but on Friday it upped this figure to 55 per cent to 65 per cent, or $66 million to $85 million.

As a result of sagging sales, the online toy merchant said it will run out of cash on March 31 (it had previously thought funds would last until June 30). It has hired Goldman, Sachs & Co "to explore strategic alternatives for the company" - these include selling the company's assets, a merger, or a cash injection. It will also announce staff cuts early next year.

eToys blamed its woes on the general slowdown in the economy, the US presidential election dithering, and "the current disfavour of Internet retailing".

"We are disappointed that sales have not materialized to the degree we had expected, but we point to the fact that the company is expected to show between 12 percent and 22 percent growth in revenue versus the same quarter last year," said eToys president and CEO Toby Lenk.

"Going forward and based on current operating realities, we will take aggressive steps to reshape the company's cost structure and to best position the company for the future." ®

Related Stories

America spends $6.3 billion in Q3
eToys softens under grassroots pressure
Tales from the bubble economy
Mighty Microsoft to miss sales targets
Xmas panic means PC fire sales

5 things you didn’t know about cloud backup

More from The Register

next story
True fact: 1 in 4 Brits are now TERRORISTS
YouGov poll reveals terrible truth about the enemy within
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?