Shares in Bluefly, Inc. (NASDAQ: BFLY), a leading online retailer of designer brands, fashion trends and superior value, will most likely drop if there even any investors in this stock when the market opens Monday after weak earnings. The penny stock of Bluefly Inc. (BFLY) closed at $1.81 with volume of less than 500 shares traded in the last trading session. BFLY announced their results for the fourth quarter and fiscal year ended December 31, 2011 on Friday when the markets were closed.
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According to the CEO of BFLY, Joseph Park, Fiscal 2011 was a pivotal period for Bluefly. The company implemented key strategies to position BFLY for future growth. To this end, they expanded their category reach with the launch of Eyefly.com in June 2011 and just prior to year end introduced Belle & Clive to consumers enabling the company to leverage the 20 million unique visitors to Bluefly.com and their more than 350 brand relationships to offer the most important brands with limited time offers at members only pricing.
BFLY is very excited by the opportunities that Belle & Clive bring to their Company and have already seen a significant increase in subscriber growth in the two quarters since they implemented this new strategy. The company begins 2012 with the foundation in place to advance their long term sales and profitability goals.
BFLY Stock YTD:
Ytd Percent Change -16.01%
Ytd Moving Average 1.94
Ytd Average Volume 2,207
Results for the full year of 2011 included the following highlights:
• Net sales for BFLY, $96.3 million, increased by approximately 9% from $88.6 million in 2010. Gross profit margin decreased to 29.4% compared to 37.5% in 2010. Bluefly claims it was primarily as a result of an increase in inventory reserves of approximately $2.2 million, a write-off of $1.0 million related to merchandise credits from suppliers that Bluefly now believes may not be collected, as well as higher promotional activity and currency fluctuations between the U.S. dollar and the Euro. The increase in inventory reserves was primarily the result of a shift in BFLY strategy with a view to accelerating inventory turns.
• Total operating expenses, $39.4 million, jumped by 6% from approximately $37.0 million for 2010. As a percentage of net sales, total operating expenses decreased to 40.9%, compared to 41.8% for 2010. The increase in total operating expenses was primarily attributable to an increase in selling and fulfillment expenses and general and administrative expenses, offset partially by a reduction in marketing expenses. Included in general and administrative expenses are a write-off and reserve of $1.2 million in connection with a trade receivable that Bluefly now believes may not be collected in its entirety. As a percentage of net sales, total marketing expenses decreased to 11.3%, compared to 14.2% for 2010.
• Operating loss was $11.1 million, as compared to $3.8 million in 2010.
• Adjusted EBITDA was negative $7.3 million, as compared to an adjusted negative EBITDA of $716,000 in 2010.
• Net loss attributable to stockholders was $11.0 million, as compared to net loss of $4.0 million in 2010. Loss per share attributable to stockholders increased to $0.43 per share, from a net loss of $0.17 per share in 2010.
• Subscribers to the Company’s websites, excluding eyefly.com, increased approximately 254% to 1,015,000 subscribers, from 287,000 subscribers in 2010.
• Cash and cash equivalents decreased to $4.4 million at December 31, 2011, compared to $10.4 million at December 31, 2010.
• Inventory increased to $32.1 million at December 31, 2011, compared to $25.1 million at December 31, 2010.
• Separately, BFLY expects to incur approximately $1.2 million in non-recurring compensation expenses, including $0.6 million related to non-cash equity compensation, in the first quarter of fiscal 2012 related to the resignation of Bluefly’s prior CEO, which was announced on February 2, 2012.
Results for the fourth quarter of 2011 included the following highlights:
• Net sales increased by approximately 3%.
• Gross profit margin was 21.9% compared to 34.9% in the fourth quarter of 2010.
• Total operating expenses increased by approximately 30%.
• Operating loss was $6.2 million, as compared to an operating income of $0.3 million in the fourth quarter of 2010.
• Adjusted EBITDA was negative $5.3 million, as compared to an adjusted positive EBITDA of $1.1 million in the fourth quarter of 2010.
• Net loss attributable to stockholders was approximately $6.2 million, as compared to net income of $0.3 million in the fourth quarter of 2010.Share