Alloy Climbs With Sponsor Revenues
Alloy, the content commerce and service site that targets Gen Y reported total revenues for the fourth quarter of fiscal 2002 increased 62% to a record $103.7 million, compared to $64.2 million in the fourth quarter of fiscal 2001. Fiscal fourth quarter net merchandise revenues of $63.7 million were up 36% compared to $46.8 million in last year's fiscal fourth quarter. The growth resulted primarily from increased catalog circulation to Alloy's expanded name database. Fiscal fourth quarter sponsorship and other revenues of $40.0 million were up 130% versus $17.4 million in the comparable period in last fiscal year.
The increase reflected a larger advertising sales force, a broader client base, and a wider range of media services offered than in the last fiscal year, resulting from a combination of internal development and strategic acquisitions.
Fourth quarter gross profit in fiscal 2002 increased to $52.0 million, or 50.1% of revenues, compared to $38.2 million, or 59.5% of revenues, in the comparable period last year largely as a result of the substantial increase in revenues.
According to the company, the decrease in gross profit percentage was primarily due to the lower gross margin profile of sponsorship activities in this fiscal year's fourth quarter compared to last fiscal year's fourth quarter as newspaper and radio advertising, event marketing, sampling and customer acquisition activities expanded relative to the company's print and interactive advertising programs, which have higher gross margins. These lower gross margin activities also accounted for a larger share of the total revenue in the fiscal fourth quarter this year as compared to last year's fiscal fourth quarter.
Commenting on the quarter, Matt Diamond, Chairman and Chief Executive Officer, said, "While we did not achieve our original financial objectives in the fourth quarter, in meeting our revised estimates we generated substantial revenues, earnings and operating cash flow. We believe we are in a strong financial position to pursue opportunities and further expand our growing advertising and marketing services franchise."
As of January 31, 2003, its fiscal year end, Alloy's consolidated database of Generation Y consumers grew to over 13.3 million total names, of which approximately 4.7 million were established buyers, versus approximately 9.6 million total names and 2.5 million established buyers as of January 31, 2002.