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

Boost IT visibility and business value

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
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.
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.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.