NEW YORK — A 110 percent increase in revenues helped catapult Alloy Inc. into the black in the third quarter.
For the three months ended Oct. 31, the New York-based Generation Y direct merchant reported a swing to net income of $11.6 million, or 28 cents a diluted share. That compares with a net loss of $2.7 million, or 11 cents, in last year’s quarter. Sales more than doubled to $93.2 million from $44.5 million.
Sponsorship and other revenues were $52 million, up 309 percent, driven by a larger advertising sales force, a broader client base and a wider range of media services. Merchandise revenues were up 29.9 percent to $41.3 million, reflecting improved catalog circulation and productivity, improved merchandising and a full quarter of sales from Dan’s Competition versus one month last year.
“We enjoyed solid revenue contributions from both our sponsorship and merchandise businesses, with a particularly strong performance registered by our newspaper advertising business,” Matt Diamond, chairman and chief executive, said in a statement. “In market conditions that are considered to be challenging, our integrated businesses continue to thrive.”
He noted youth spending remains robust and the demographic remains a highly desirable market for advertisers.
As of Oct. 31, Alloy’s consolidated database of Generation Y consumers grew to more than 12.3 million names, of which roughly 4.1 million were established buyers, versus 8.5 million names and 2.2 million established buyers last year.
Diamond is forecasting fourth-quarter earnings before taxes and amortization between $15 million and $16 million, merchandise revenues between $60 million and $62 million and sponsorship and other revenues between $34 million and $36 million. In 2003, he said he is expecting at least $190 million in merchandise revenues and $180 million in sponsorship revenues.