Drugstore.com reports record 4Q sales

BELLEVUE, Wash. Drugstore.com on Wednesday reported net sales of $366.6 million for its fiscal year ended Dec. 28, representing a net loss of $8.3 million. The online druggist recorded EBITDA of $13.9 million, more than double the adjusted EBITDA reported in fiscal year 2007, the company noted. Additionally, the company reported operating cash flow of $9.9 million for 2008 compared with $7.8 million for 2007.

"I am pleased to report record quarterly [over-the-counter] revenues, net income, free cash flow and adjusted EBITDA, as we delivered a profitable fourth quarter and achieved positive free cash flow for the year for the first time in company history," stated Dawn Lepore, CEO and chairman of drugstore.com. "Importantly, while holiday sales were clearly impacted by the economy, we saw strong sales of our everyday OTC basics, reinforcing our belief that a large portion of our products are not considered discretionary by our customers. Overall, we continued to drive solid OTC and vision growth of 6% and 14.5%, respectively, significantly ahead of eCommerce trends. … These improvements allowed us to be more promotional in the fourth quarter, while maintaining a strong operating model,” she said.

This kind of success portends well for the future, Lepore noted. “We can and will continue to grow our OTC and vision revenues amidst a more challenging economic environment. January started off strong, with continued demand for everyday OTC basics, increased [flexible-spending-account] sales, and customers' capitalizing on our loyalty program — drugstore.com dollars. Importantly, we also have a number of key initiatives — such as ramping our strategic partnerships with Medco and Rite Aid, adding new prestige beauty brands, and expanding international sales — that leverage our existing infrastructure and which should help fuel growth in 2009,” Lepore said.

For the first quarter of 2009, the company is targeting net sales in the range of $93 million to $97 million, net income ranging from flat to a net loss of $2 million, and adjusted EBITDA in the range of $3 million to $5 million.

Drugstore.com served approximately 406,000 new customers during the fourth quarter 2008, up 8% over the same period in the prior year, brining the total number of unique customers to 9.8 million since inception. The number of active customers for the quarter was 2.6 million, up 9% year over year.