Drugstore.com hit record sales of $100.3 million in the second quarter amid strong demand for non-prescription products and contact lenses. The Bellevue-based ecommerce company also reported a profit for a third quarter in a row.
Drugstore, which started out as an online pharmacy filling prescription orders, has been steadily shifting its focus to non-prescription, over-the-counter (OTC) items like toothpaste, shampoo, diapers and razor blades.
The company's Q2 sales of $100.3 were up from $92.2 million the same quarter a year ago. Net income was $1 million, or 1 cent per share, up from a net loss of $2.3 million, or 2 cents per share, in the year-ago period. The company said its Q2 2009 net income includes a $1.1 million non-cash stock-based compensation expense.
It was the third profitable quarter in a row for the Bellevue-based ecommerce company, which turned its first profit in Q4 2008.
"During the second quarter, our marketing strategy, new partnerships, and improved conversion helped drive new customer growth of 14%," said drugstore CEO Dawn Lepore, in a statement.
Drugstore.com on June 1 started handling OTC orders for Medco Health Solutions Inc., a giant pharmacy benefits manager. Lepore said she "expect revenues from this partnership to start to ramp in the second half of the year."
Another key drugstore partnership -- with the Rite Aid chain -- is changing. For years, drugstore.com ran the software for Rite Aid’s web site for refilling prescriptions (receiving a fee for every order). Rite Aid last fall took control of that operation itself, and paid drugstore.com $1 million a month through June to end the contract early. Drugstore has a new agreement with Rite Aid to handle over-the-counter product orders (along the same lines as the Medco deal).
Drugstore is also developing more "microsites" devoted to specific product categories. The company already sells products through websites beauty.com and visiondirect.com, and plans to launch another site devoted to sexual health products (and perhaps others).
Drugstore's guidance for the third quarter wasn't quite as rosy. The company said it expects net sales in the range of $94.0 million to $96.0 million, and a net loss in the range of $2.8 to $3.8 million.
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