(RTTNews) - Tuesday, Drugstore.com Inc. (DSCM: News ), an online retailer of health and beauty products, reported a narrower loss for the third quarter as revenues increased from the year-ago period. The company also initiated guidance for the fourth quarter of fiscal 2009.

The Bellevue, Washington-based company's net loss narrowed to $1.6 million or $0.02 per share from $3.6 million or $0.04 per share in the prior-year period.

Two analysts polled by Thomson Reuters expected the company to report a loss of $0.04 per share for the third quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter rose to $96.8 million from $87.8 million reported year-ago. Revenues beat street expectations which stood at $94.5 million.

Dawn Lepore, chairman and chief executive officer commented, "In the third quarter, drugstore.com reported double digit top-line growth as OTC revenues increased by approximately 17% and beauty.com expanded by 19%."

The company added that the third quarter saw a 11% growth in vision segment, compared to previous year and a general 27% year-on-year growth in the number of customers.
Gross margins improved 70 basis points year-over-year to 29.3%, compared with 28.6% reported last year, helped by a 310 basis point decline in operating expenses.

For the nine months , the company reported net income of $0.246 million, compared with a loss of $8.58 million last year. On a per share basis, earnings broke even for the period, while it was a loss of $0.09 a year-ago.

Net sales for the nine-month period increased to $295.47 million from $272.64 million last year.

While guiding fourth quarter results, the company said it expects to report net loss in the range of $1.8 million to $2.8 million. Net sales are expected to be in the range of $107.0 million to $110.0 million.

DSCM finished Tuesday's market trade at $2.66 down 4 cents on the Nasdaq.

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by RTT Staff Writer

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