Current Report

Exhibit 99.1

drugstore.com Reports Strong Revenue Growth and Record Gross Margins in the Third Quarter of 2009

-OTC Revenue Growth of 17%, Beauty.com Growth of 19% and Vision Growth of 11%

- New Customer Growth of 27% Year-Over-Year

BELLEVUE, Wash., October 20, 2009 (GLOBE NEWSWIRE) — drugstore.com, inc. (Nasdaq:DSCM), a leading online retailer of health, beauty, vision, and pharmacy products, today announced its financial results for the third quarter ended September 27, 2009. The company reported quarterly net sales of $96.8 million, driven by strong OTC and vision sales. Gross margins increased 70 basis points year-over-year to a record 29.3% and the company’s net loss in its seasonally softest quarter was $1.6 million, an improvement of $2.0 million from the same period a year ago. The company reported adjusted EBITDA of $3.0 million which compared to $3.6 million reported in the same period of the prior year. 2008 third quarter adjusted EBITDA results included a $3.4 million contribution from the company’s discontinued local-pick-up (LPU) business. Adjusted EBITDA is a non-GAAP financial measure defined as earnings before interest, taxes, depreciation, and amortization of intangible assets and non-cash marketing expense, adjusted to exclude the impact of stock-based compensation expense.

“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%,” said Dawn Lepore, chief executive officer and chairman of the board of drugstore.com, inc. “Our growth was a result of continued strong sales of replenishment and beauty items to our loyal customer base and impressive new customer growth of 27%. This new customer growth was achieved while reducing our marketing cost per new customer to its lowest level since 2007. The initial success of key partnerships contributed to this effort, accounting for roughly 9% of overall new customer additions.”

“Gross margins were a record 29.3%, reflecting the continued success of our profitability initiatives, and we reduced operating expenses as a percentage of net sales from the prior year by 310 basis points. As a result, we reported adjusted EBITDA of over $3.0 million, a year-over-year increase of $2.8 million, excluding the EBITDA generated from our discontinued LPU segment in the prior year. Throughout 2009, we have been executing on plan in our core business and continuing to roll out new growth initiatives and partnerships that we believe can add incremental revenue growth, especially in 2010. Most recently, we launched our first microsite - SexualWellBeing.com(TM) - and expect to add 5 to 8 more microsites by the end of 2010,” concluded Ms. Lepore.

Net loss for the third quarter of 2009 was $1.6 million, or $0.02 per share, compared to a net loss of $3.6 million, or $0.04 per share, for the third quarter of 2008. The third quarter of 2009 net loss includes $1.4 million in non-cash stock-based compensation expense.

Outlook for Fourth Quarter of 2009

For the fourth quarter of 2009, the company is targeting net sales in the range of $107.0 million to $110.0 million, a net loss in the range of $1.8 million to $2.8 million, and adjusted EBITDA in the range of $2.5 million to $3.5 million. Fiscal year 2009 is a 53-week year, with the fourth quarter of 2009 representing a 14-week period.

Financial and Operational Highlights for the Third Quarter of 2009

(All comparisons are made to the third quarter of 2008 and reflect the reporting of the local pick-up business as discontinued operations)

Key Financial Highlights:

Net Sales Summary:

Key Customer Milestones:

Conference Call

Investors, analysts, and other interested parties are invited to join the drugstore.com, inc. quarterly conference call on, October 20, 2009 at 4:30 p.m. ET (1:30 p.m. PT). To participate, callers should dial 877-941-8416 (international callers should dial 480-629-9808) five minutes beforehand. Investors may also listen to the conference call live at http://investor.drugstore.com/ , by clicking on the “audio” hyperlink. A replay of the call will be available through Saturday, October 24, 2009 by dialing 800-406-7325 and enter passcode 4166337# and international parties should call 303-590-3030 and enter passcode 4166337# beginning two hours after completion of the call.

Non-GAAP Measures

To supplement the consolidated financial statements presented in accordance with GAAP, drugstore.com, inc. uses the non-GAAP measure of adjusted EBITDA, defined as earnings before interest, taxes, depreciation, and amortization of intangible assets and non-cash marketing expenses, adjusted to exclude the impact of stock-based compensation expense. This non-GAAP measure is provided to enhance the user’s overall understanding of the company’s current financial performance. Management believes that adjusted EBITDA, as defined, provides useful information to the company and to investors by excluding certain items that may not be indicative of the company’s core operating results. In addition, because drugstore.com, inc. has historically provided adjusted EBITDA measures to investors, management believes that including adjusted EBITDA measures provides consistency in the company’s financial reporting. However, adjusted EBITDA should not be considered in isolation, or as a substitute for, or as superior to, net income/loss, cash flows, or other consolidated income/loss or cash flow data prepared in accordance with GAAP, or as a measure of the company’s profitability or liquidity. Although adjusted EBITDA is frequently used as a measure of operating performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Net income/loss is the closest financial measure prepared by the company in accordance with GAAP in terms of comparability to adjusted EBITDA. A reconciliation of adjusted EBITDA to net income/loss is included with the financial statements attached to this release.

In addition, the company uses the non-GAAP measure of free cash flow, defined as net cash provided by (used in) operating activities plus proceeds from the sale of discontinued operations less purchases of fixed assets as disclosed on our consolidated statements of cash flows. Management believes that free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to service debt obligations, make investments, fund acquisitions and for certain other activities. Free cash flow is not a measure determined in accordance with GAAP and may not be defined or calculated by other companies in the same manner. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to accounts payable, including inventory purchases, and accounts receivable. Since free cash flow includes investments in operating assets, management believes this non-GAAP liquidity metric is useful in addition to the most directly comparable GAAP measure of net cash provided by (used in) operating activities, and should not be used as a substitute for it or any other measure determined in accordance with GAAP. A reconciliation of free cash flow to net cash provided by operating activities is included with the supplemental financial schedules attached to this release.

About drugstore.com, inc.

drugstore.com, inc. (Nasdaq:DSCM) is a leading online retailer of health, beauty, vision, and pharmacy products. Our portfolio of brands includes: drugstore.com(tm), Beauty.com(tm), and VisionDirect.com(tm). All are accessible from http://www.drugstore.com and provide a convenient, private, and informative shopping experience while offering a wide assortment of more than 45,000 products at competitive prices.

The drugstore.com pharmacy is certified by the National Association of Boards of Pharmacy (NABP) as a Verified Internet Pharmacy Practice Site (VIPPS) and operates in compliance with federal and state laws and regulations in the United States.

The drugstore.com, inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6419

The financial results contained in this press release are preliminary and unaudited. In addition, this press release contains forward-looking statements regarding future events or the future financial and operational performance of drugstore.com, inc. Words such as “expect,” “target,” “believe,” “may,” “will,” “continue,” “start,” “should,” and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are based on current expectations, are not guarantees of future performance and involve assumptions, risks, and uncertainties. Actual performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such differences could include, among other things: effects of changes in the economy, changes in consumer spending, fluctuations in the stock market, changes affecting the Internet, online retailing and advertising, difficulties establishing our brand, and building a critical mass of customers, the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results, risks related to business combinations and strategic alliances, possible tax liabilities relating to the collection of sales tax, consumer trends, the level of competition, seasonality, the timing and success of expansion efforts, changes in senior management, risks related to systems interruptions, possible governmental regulation, and the ability to manage a growing business. Additional information regarding factors that potentially could affect the business, financial condition, and operating results of drugstore.com, inc. is included in the company’s periodic filings with the SEC on Forms 10-K, 10-Q, and 8-K. drugstore.com, inc. expressly disclaims any intent or obligation to update any forward-looking statement, except as otherwise specifically stated by it.