Why Vitacost.com Shares Plummeted

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What: Shares of Vitacost.com closed down 17% after the online retailer missed expectations in its quarterly report.

So what: The vendor of health and wellness products lost $0.11 per share, a penny worse than estimates, while revenue rose 10.1% to $90.5 million, below the consensus at $97.88 million. The company added a total of 312,000 new customers in the quarter, a decrease of 2% from a year ago, while total active customers grew 6% to 2.1 million. CEO Jeffrey Horowitz said, "During the quarter, we tested new promotional strategies in order to better balance customer growth and retention with gross margin. Going forward, we will continue to adjust our promotional strategy accordingly."

Now what: It's hard to see a positive in this report. While the company's net loss improved from $0.15 per share to $0.11, it still seems like profits will be elusive for a while. Analysts expect losses through this year and next even as revenue growth is projected to be near 20%. Online retail is a very competitive arena, and even with a strong customer base, Vitacost is having trouble making the cost equation work.

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The article Why Vitacost.com Shares Plummeted originally appeared on Fool.com.

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