Despite anemic September sales and the bankruptcy of a top 10 client, GSI Commerce, Inc. reported that net revenues increased 36.1% to $186.8 million for third quarter from $137.3 million in Q3 last year. Much of the revenue gain came from an 84% increase in service fee revenues GSI Commerce earns for managing other companies e-commerce operations. By comparison, net revenues from product sales rose 11.8% to $102.1 million.
For the quarter, management for GSI Commerce said the company had seen strong results from its professional sports league business, mixed results from general sporting goods and weakness in electronics.
GSICs quarterly net loss more than doubled as costs expanded. Product development expenses, driven largely by expenses associated with acquired companies, increased 62% to $25.7 million from $15.9 million in the year ago period. With that expansion, the companys quarter net loss widened to $12.8 million from a loss of $6.1 million for the year-ago quarter.
Recently, GSIC signed a multi-year e-commerce agreement with Big Lots, which had trailing 12-month revenues of $4.7 billion. They also signed client renewals with Dicks SG and Aeropostale.
Still, no single client is projected to account for more than 7% of non-GAAP net revenues in 2009, according to CFO Michael Conn.
Conn noted that amidst a dynamic financial environment, revenues issues were low-lighted by several “client specific” challenges for the quarter, the foremost being the recent bankruptcy of Linens N Things.
Regarding guidance, management slightly lowered revenue projections for the year, from approximately $1 billion to a range of $950 million to $985 million. Softening consumer trends and eroding revenues from Linens N Things were cited as the chief factors contributing to the re-adjustment.
