Stock Watch: Solid Results Lift (Nasdaq: ASFD) rose 5/32 to 2 5/8 early Tuesday, after the company reported better-than-expected results for the third quarter and said it expects losses to continue to shrink in coming quarters.

The Houston, Texas-based Internet retailer said sales for the quarter rose 173 percent from a year earlier to $12 million, as the number of customers rose 434 percent. The loss before items was $8.8 million, or 19 cents per share, beating analysts’ predictions of a 22 cent loss.

Ashford said it expects to turn a profit by the end of next year, with losses in the meantime that are “considerably lower” than previously predicted. Gross margin improved to 19.1 percent in the third quarter from 18.6 percent in the second, thanks to higher sales of corporate gifts and a broader array of items, Ashford said. The company sells luxury items like jewelry, watches, perfumes and accessories.

Ashford said it cut customer acquisition costs for the third quarter by 66 percent from a year earlier. Repeat customers accounted for 33 percent of total sales, up from 26 percent in the second quarter and 16 percent in the 1999 third quarter.

“We had a very successful quarter that demonstrates our continued progress on the path to profitability,” said chief executive officer Kenny Kurtzman.

To build business this holiday season, Ashford said it will guarantee free, overnight delivery of every in-stock item ordered by 5 p.m. CST, Monday through Friday.

The company also said it expanded an agreement with Microsoft Corp., becoming an anchor tenant on

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