Zulily misses Street with Q4 income, revenue

Seattle - A significant increase in selling, general and administrative expenses, as well as higher marketing expenses, helped plunge net income at pure play retailer Zulily Inc. below Wall Street expectations during the fourth quarter of fiscal 2014. Net income fell 15% to $10.88 million from $12.75 million.



Net sales rose an impressive 52% to $391.35 million from $257.03 million, but still missed Wall Street projections. Increases in active customers who placed an order at least once in the past year and average order value, as well as a large increase in total orders, drove net sales growth. Fifty-one percent of North American orders were placed from a mobile device, up 13% from approximately 45%.



Darrell Cavens, CEO of Zulily, struck a positive tone despite declining profits and missing Wall Street expectations.



“We closed out the year with significant growth across the business,” said Cavens. “We increased year-over-year net sales by 72% and drove strong profitability. Our goal is to build Zulily into one of the most innovative and profitable consumer retail Internet businesses of our time.”



For the full fiscal year, net income rose 15% to 14.89 million from $12.9 million. Net sales surged 72% to $1.2 billion from $695.7 million.



Looking ahead, net sales for the first quarter of fiscal 2015 are expected to range between $300 million and $320 million, and to range between $1.5 billion and $1.65 billion for the full fiscal year.