What do bridal bouquets, handfuls of precooked rice, and The Knot (Nasdaq: KNOT) have in common?
They're all getting tossed these days.
Shares of the wedding-planning website took a hit after another disappointing quarter last night. A sharp decline in the company's offline publishing business offset online gains, with revenue inching just 1% higher to $28.7 million during the second quarter. The Knot posted a profit of $0.07 a share, less than half the $0.15 a share it brought to the altar a year ago. Wall Street was banking on earnings of $0.09 a share on $31.2 million in revenue.
The Knot has so much promise, but it's been a real heartbreaker lately. The company has missed analyst bottom-line guesstimates in three of the past four quarters.
The company isn't necessarily any less relevant these days. Its namesake site, which generates leads for wedding-service providers, drew a record 116,000 new registrations for the month of June.
It has also been building up its properties that reach out further into the marriage cycle. For example, it's entered the online baby registry business to enhance its TheBump.com site for expectant mothers, and has given more gravity to its TheNest.com site for newlyweds.
The Knot has competition in those areas. Bumping up against companies such as The Parent Company (Nasdaq: KIDS), Martha Stewart Living Omnimedia (NYSE: MSO), Disney's (NYSE: DIS) Family.com, and Alloy (Nasdaq: ALOY) presents unique challenges that it doesn't normally find in its flagship niche, where it's the category-killer for budding brides-to-be.
However, just as the recent weakness at high-end engagement-ring specialist Blue Nile (Nasdaq: NILE) shows, people are still getting married, but they're spending prudently. It follows that a penny-pinching approach to marriages will find service providers also scaling back on the marketing through sites such as The Knot.
Reality is lifting its veil at the company. The Knot now expects to grow revenue by 9% to 11% this year, well off the mid-teens spurt it was originally targeting. That stings, but it will sting even more if the company can't rein in its bubbling overhead.
It is then -- and only then -- that The Knot will be exactly like the bridal bouquet: tossed by one, but coveted by many.
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