RealTime IT News

A Silver Lining in Peapod's Clouds?

Dancing in the aisles they're not, but Chicago-based Internet grocery operation Peapod said it attained operating profitability for March in its Chicago market.

The bad news was that the company also reported a first quarter net loss of $15.5 million or 86 cents per share, compared to a net loss of $12.7 million or 70 cents per share for the year-ago quarter.

Revenues for the first quarter were $24.9 million compared with $24.8 million a year ago.

The company said it is also making "considerable progress" toward reaching operating profitability in the Long Island and Connecticut markets, where it operates in strategic partnership with the Ahold supermarket chain Stop & Shop. Ahold, a leading international food provider, owns a 58 percent stake in Peapod.

"We are confident that Peapod can become the first Internet grocer to build a sustainable, profitable business," said Marc van Gelder, Peapod president and CEO. "We expect current positive trends to strengthen in subsequent quarters and we are focused on achieving operating profitability in our current markets before we expand into new markets."

Peapod stock closed Monday at $1.36, up 21 cents. Its 52-week high is $3.87; the low is 68 cents. The company has never had a profitable quarter since going public in 1997.

When determining operating profitability in a given market, Peapod said it includes corporate expense allocations for its centralized call and billing center, transaction fees and telecom expenses, while excluding marketing costs, sales incentives (now netted against revenue) and other corporate overhead.

Peapod has exited five markets since September 2000: Austin, Houston and Dallas, Columbus, Ohio and San Francisco. The company currently serves markets in Boston, Connecticut, Long Island, Washington, D.C. and Chicago.