http://www.marketwatch.com/news/sto...4AAD-9FD7-94C167D5F5C7}&siteid=yhoo&dist=yhoo
http://retail.seekingalpha.com/article/24957
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From the Seeking Alpha Estimate:
Dec 2005: # transactions = 1,394,434
Oct 2006: # transactions = 632,303
Nov 2006: # transactions = 1,256,345
Dec 2006: # transactions = 1,836,440
Tot Q4/06: # transactions = 3,725,088
Q4 of 2005 created revenue = $317,980,000. Returns are "in" this number. We know from the Q3/2006 customer data slides (slide #7) that the average order size ('AOS') was about $103/transaction in Q4/2005. Therefore ~ by dividing we get the Q4 2005 # of transactions (net of returns) = 3,087,185.
From above, the Dec 2005: # of transactions was recorded ast 1,394,434. So, the difference must be the number of transactions done in Oct/Nov of 2005. Calculated as 3,087,185 - 1,394,434 = 1,692,751
From above, we know that the total transactions in Oct/Nov of 2006 = 632,303 + 1,256,345 = 1,888,648.
So, the YOY growth in the # of transactions for the periods Oct/Nov of 2005 vs. Oct/Nov of 2006 = 11.6% YOY growth
This seems to mesh with what Patrick suggested. A very slow start (11.6% YOY growth) that kicked into high gear (32% YOY growth for Dec) in the middle of November.
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Looking then at the whole of Q4 and comparing the growth in transactions YOY from 2005 to 2006 we get the following;
total q4/06 transactions estimated = 3,725,088
total q4/05 transactions estimated = 3,087,185
Based on this YOY growth would be 20.66%.
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Now the question is what if any growth should we assume occured in the average order size. Factors: Further discounting of inventory, increases due to gift finder, inflation etc...
Page 21 of the Q3/2006 transcript ~ Jason suggests that they had $10M - $20M of inventory that they want to sell and never buy again. So, if you take the high end of $20M and say that is sells for 20% less than it would have just to get rid of it, then that is still only a $4M hit to revenue. On the other hand if the gift finder was able to double AOS's then we only need about 20,000 transactions to have been funnelled through here to offset this discounting which is peanuts (1/2 of 1% of the number of transactions done in Q4).
So, if we do a bit of a sensitivity test using the YOY growth in transactions above and a varying estimate for AOS;
If AOS falls -5% then the growth should be 20.66% - 5% = 15.66%
If AOS is flat - then the growth should be = 20.66%
If AOS is up 5% then the growth should be 25.66%
This gives us a range of 15.66% to about 25.66%. That seems to be on par with all the industry data that I have read which suggests that online retail grew on average 26% YOY. I would submit that 20.66% - 25.66% seems more likely.
I hope this q delivers a swift uppercut to those not playing by the rules.
<IV
