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iTurf beats estimates, faces Alloy Online

iTurf Inc. (Nasdaq: TURF) posted second-quarter net loss Tuesday of $1.8 million, or 10 cents a share. Though its earnings make the grade compared to the loss of 13 cents a share expected by First Call, iTurf may be chasing its upstart competitor Alloy Online Inc. (Nasdaq: ALOY) back to school after it was puffed up by an upgrade Monday.

Shares of iTurf, the Generation Y content and commerce provider, were up 13/16 to 15 Wednesday morning, following a rocky descent from their high of 66. Alloy shares were neck and neck with iTurf, up 1/4 to 15.

The company's net loss of $1.8 million compares to a net loss of $24,000, or a break-even figure per share, a year ago. Revenue for the second quarter nearly quadrupled to $3 million from $760,000 in the second quarter of last year.

"During the quarter, our revenues grew nearly fourfold, reflecting sizable increases at our seven e-commerce properties and solid gains in non-commerce revenue. More importantly, our user metrics continued to experience significant growth across all key measures," said Stephen Kahn, CEO in a company release.

According to Media Metrix, iTurf's page views surpassed 80 million in July and unique visitors approached 1.3 million.

iTurf may be good, but so is competitor Alloy, and it's getting better, according to Volpe Brown Whelan & Co., who just upgraded the stock from "buy" to "strong buy." Analyst Derek L. Brown cites the approach of the back to school and holiday seasons, a new aggressive marketing campaign, and traction from partnerships with Yahoo! and Excite@Home for his bullish stance on the company. Alloy got a boost Monday from the upgrade. Volpe was an underwriter for Alloy's IPO.

While iTurf is trading at 17.9 times its estimated year 2000 gross profit levels, Alloy is trading at only 4.5 times their amount, making them a steal compared to their competitor, said Brown. iTurf made Renaissance Capital's list of the worst IPOs for 1999, but blasted estimates on first quarter earnings. Alloy also made a mediocre debut.

Banc Boston Robertson Stephens was also bullish on Alloy after the August 11 launch of its auction site tailored to Generation Y. Analyst Lauren Cooks Levitan said Alloy has been overlooked by many investors. "The company is well prepared to capture significant share of Gen Y's wallet share this holiday season and are encouraged by what we believe are positive early leads on the company's back-to-school business," she added in a report.

iTurf Is a subsidiary of dELiA*s Inc. (Nasdaq: DLIA). dELiA*s Inc. owns about 72 percent of the outstanding common stock of iTurf. After the acquisition of OnTap.com by iTurf, expected to be completed in September, dELiA*s Inc. expects to own around 66 percent of the outstanding common stock of iTurf. dELiA*s Inc. plans to report second quarter results within a week of this release.

iTurf's network of websites includes dELiAs.cOm, gURL.com, TSISoccer.com, contentsonline.com, discountdomain.com, droog.com, dotdotdash.com and StorybookHeirlooms.com.

The company's marketing alliance with America Online as well as partnerships with Generation Y focused companies like RocketCash and DoughNET, and a pending acquisition of OnTap.com, a leading college hub, are some of the company's new initiatives.

iTurf revised its fiscal 1999 and fiscal 2000 to reflect higher revenues and operating expenditures due to the purchase of OnTap.com, predicting revenue of 15%-20% above internal plan and operating expenses, excluding depreciation and amortization, of $11-13 million.

Three out of 5 analysts covering iTurf rate it a "moderate buy" according to Zacks Investment Research. Three out of three analysts covering Alloy rate it a "moderate buy."