Zulily grows sales 29% in Q1

May 5, 2015 05:05 PM

It was another record quarter for zulily Inc., the fast-growing publicly traded flash sale e-retailer, which announced strong sales increases, improved delivery times and major mobile technology upgrades.

"We made significant progress against our 2015 objectives to improve the daily experience, deliver the perfect order and expand gross margins," CEO Darrell Cavens says. "The percentage of orders placed on mobile platforms reached an all-time high in Q1, order to ship times decreased, and gross margins hit our long-term financial target of 30% less than two years after our IPO.”

On average, orders are shipped within 10.5 days of purchase, down from 12.8 days a year ago, zulily says.

The e-retailer, ranked No. 39 in the Internet Retailer 2015 Top 500 Guide, launched a responsive design website last week. Responsive design is a format that adapts the look of a retail website to the device the consumer is using. It uses one code base, meaning retailers don’t have to operate several sites to account for the many types of screens consumers use to access the Internet.

Zulily also says it has pulled back on the number of products it's offering on any given day, as customers were complaining about over assortment. Now the merchant runs around 100 limited-time events per day.

For the period ended March 29, zulily reported:

  • Net sales of $306.6 million, a 28.9% increase compared with $237.9 million in the first quarter of 2014.
  • Approximately 55% of orders were placed from a mobile device, up from 50% in the fourth quarter of 2014.
  • The number of active customers grew 35% year over year to 5.0 million. Zulily defines an active customer as someone who has purchased from zulily at least once in the past year.
  • Total orders placed increased to 6.3 million, an increase of 15% compared with the first quarter of last year.
  • Average order value was $56.26, an increase of 2% year over year.
  • For the 12 months ended March 29, 86% of orders were placed by customers who had previously purchased from zulily.
  • Marketing expenses were $292,000, up 79.1% from $163,000 in the year-ago period.
  • Net loss of $2.5 million, compared with a loss of $3.0 million a year ago.

Zulily also rolled out what it calls vendor fulfillment services in the last quarter, meaning it's now allowing its suppliers to pay the merchant to warehouse and ship products they sell on and other e-commerce sites. Company executives did not disclose any details, but say the new program has been successful thus far in getting zulily better access to product. "While still representing a small portion of units shipped, the program continues to expand rapidly with new vendors signing on every week," Cavens says.

Zulily is projecting $1.3 to $1.4 billion in total sales this year. That would make for 8.3% to 16.7% growth compared to the $1.2 billion it secured in 2014. It is also expecting to spend between $35.0 and $40.0 million in capital expenditures this year, mostly in expanding capacity and productivity at its fulfillment centers.

Zulily went public in November 2013. Since its founding in 2010, it has grown on average 185.7% per year.




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