First-quarter Internet sales better than expected

The first quarter, usually a sleepy time in the retail business, turned out to be unusually busy for online merchants.

The pace of Internet sales, which picked up momentum after Sept. 11, further accelerated in the first three months of 2002, fed by an improving economy, an influx of new shoppers on the Web as well as increased spending from previous customers, according to company reports released this week.

On Tuesday, Amazon.com, defying critics' contention that its business was stagnating, reported a net loss smaller than Wall Street projections and said sales grew faster than anticipated. The industry bellwether credited the improvement to a combination of price cuts and offers of free shipping.

Meanwhile, 1-800 Flowers, a Web site that sells flowers and other gifts, announced a slight profit for its fiscal third quarter — its second straight period of profitability — beating Wall Street projections of a 2 cent loss. Sales met expectations, but the company was able to attract a larger-than-anticipated number of new customers even with a decrease in marketing spending, CEO Jim McMann said.

News source: USAToday - First-quarter Internet sales better than expected