GSI Commerce, Inc. reported that second quarter revenues surged 47% to $193.2 million.  Product sales grew 20% to $107.1 million.  On a conference call with analysts, GSI Commerce CFO Michael Conn said they saw “strong results” from the pro sports league business, “mixed results” from general sporting goods and weakness in electronics, but all improved from the Q1 trend.


Also driving revenue growth was a 104% hike in service fees to $86.2 million, driven by contributions from three acquisitions made since mid-2007, strong growth in comp store activity, the addition of new partners, and organic growth in marketing services and international.
Product margins improved 60 basis points to 26.7% of sales, reflecting higher year-over-year sporting goods margins and favorable mix, with sporting goods increasing as a percentage of total product sales, and electronics decreasing as a percentage of total product sales.
The net loss was $19 million, or 40 cents a share, compared to a loss of $5 million, or 11 cents, a year ago.


In the Q&A session, Michael Rubin, GSI’s CEO, noted that GSI still doesnt buy directly from Nike, but noted that Dick’s Sporting Goods and The Sports Authority, which represent “the majority” of GSI’s full-line sporting goods business, own a broad assortment of Nike that is made available on their websites.


“I think they have a very competitive assortment,” Rubin said of DKS and TSA. “That’s something that changed for us in the last year or so, and certainly been a nice driver to each of their businesses.”
A GSI spokesman noted that although GSI doesnt buy apparel and footwear directly from Nike, it does buy other categories such as golf equipment.