Zulily Profit Tops Street, Details Strong Outlook; Stock Up

(RTTNews) - Zulily Inc. (ZU), an online retailer for moms and children, Monday reported a better-than-expected fourth-quarter profit due mainly to a surge in sales. Looking ahead, the company, which went public in November, also provided a robust sales outlook for the first quarter and fiscal year 2014.

Shares of Zulily jumped about 10 percent in after-hours trade on the Nasdaq.

Zulily's growth reflects an exciting product range at great value, said CEO Darrell Cavens. "We'll continue to aggressively invest in fulfillment, technology and people to maximize the long-term potential of our business."

Seattle, Washington-based Zulily sells toys and sports equipment, women's apparel and other items from specialized vendors and sells them at short-term discounts, or flash sales.

For the fourth quarter, Zulily posted net income to stockholders of $4.5 million or $0.05 per share versus a net loss of $30.7 million or $0.71 per share last year.

Results for the prior-year quarter included preferred stock deemed dividend of $32 million.

Excluding items, adjusted earnings for the quarter were $13 million or $0.10 per share, compared with $3 million or $0.03 per share in the prior year.

On average, six analysts polled by Thomson Reuters expected earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the fourth quarter surged to $257 million from $128.5 million a year ago. Analysts expected sales of about $225.5 million for the quarter.

Active customers grew to 3.2 million by the end of 2013, a more than two-fold jump from the prior year.

Zulily's results come as it strives to compete in a highly competitive marketplace dominated by the likes of Amazon.com Inc. (AMZN) and eBay Inc. (EBAY).

For the first quarter, Zulily expects sales of $225 million to $235 million while analysts currently expect $222.9 million. The company expects a net loss of between $5 million and $1 million.

For fiscal year 2014, the company has projected sales of $1.10 billion to $1.15 billion while analysts currently estimate $1.11 billion.

Zulily, formerly known as BSI Holdings Inc., was founded in 2009 by Mark Vadon, who owns a 30 percent stake in the company. CEO Darrell Cavens owns about 20 percent.

The company went public on November 15 after selling 11.5 million shares at $22 each. Its stock surged on the first day of trading to close at $37.52. On Monday, the stock closed at $42.84, up $2.14 or 5.26%. In after hours, the stock gained $4.10 or 9.57% at $46.94.