"eToys reported fiscal second quarter revenues of $26.0 million, a 95.5% increase versus the same period last year, and in line with our estimate of $26.0 million," said Levitan. "Better-than-expected gross margin of 22.5% resulted in a cash EPS loss of $(0.33) that was 2 cents lower than our estimate of $(0.35). eToys reported fiscal second quarter revenues of $26.0 million, a 95.5% increase versus the same period last year, and in line with our estimate of $26.0 million. Better-than-expected gross margin of 22.5% resulted in a cash EPS loss of $(0.33) that was 2 cents better than our estimate of $(0.35). We continue to view an investment in eToys as highly risky and only appropriate for speculative investors with longer-term investment horizons. We continue to believe that eToys' growing brand presence, substantially improved fulfillment and leading merchandising capabilities position the company to achieve continued robust growth and profitability longer term. Thus, with shares of eToys already trading at depressed levels, we are maintaining our Buy rating with the caveats mentioned above and look for early reads on the current holiday season and the potential for third quarter results to lead to positive earnings revisions for 2001 as potential catalysts for the stock."
