Shares of Cimpress (CMPR 2.58%) declined 19.6% in January, according to data from S&P Global Market Intelligence, after the mass-customization company announced disappointing fiscal second-quarter results.
Even as the S&P 500 rose 8% last month, Cimpress stock plunged more than 27% on Jan. 31 alone -- the first trading day after the company's holiday-quarter results hit the wires.
That's not to say Cimpress' quarter looked bad at first glance. Revenue climbed 8.3% year over year to $825.6 million, while net income arrived at $69 million, or $2.17 per share. By comparison, however, both the top and bottom lines arrived well below analysts' consensus estimates for revenue of $855 million and earnings of $2.38 per share.
Arguably most concerning, Cimpress' core Vistaprint business saw revenue rise a modest 1.3% to $434.3 million. Management blamed a combination of greater competition, discounting, and inefficient ad spending. And though Cimpress' Upload & Print and National Pen segments fared better, with revenue climbing 5.9% and 5.4%, respectively, both also arrived well below expectations.
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Cimpress CEO Robert Keane admitted the quarter was "poor," and "the worst in a long time," adding that the company is working with a sense of urgency to tackle its challenges. In show of his confidence in the company, Keane also reduced his cash compensation to the legally required minimum of $455 per week, instead opting for performance share units that will be worthless unless Cimpress stock's three-year moving average achieves a compound annual growth rate of at least 11% over a rolling six- to 10-year period.
Until Cimpress shows some tangible progress toward successfully implementing its turnaround, however, I suspect the stock will remain depressed.