Tax-prep software company Intuit (NASDAQ:INTU) doesn't report its fiscal Q2 2019 earnings for another month, but the stock is already taking a hit on the back of a disappointing update the company released yesterday evening. Intuit shares are down 6% as of 12:15 p.m. EDT.
In its "final update for its fiscal year 2019 consumer tax offerings," Intuit noted that TurboTax Online unit sales grew 7% year over year, while overall TurboTax unit sales (online and off) were up only 5%. In its statement, Intuit called these results "great" and noted that it grew its market share in the quarter.
But if that's the case, why are Intuit shares down today?
Well, for one thing, Intuit CFO Michelle Clatterbuck noted that thanks to the sales mentioned above, "full-year fiscal 2019 Consumer Group revenue growth [will be] approximately 10 percent, at the high end of our previous guidance range of 9 to 10 percent." The problem may be that Wall Street is still looking for something more like 11% total revenue growth at Intuit for Q3, in line with previous guidance.
Investors may be extrapolating from the consumer group revenue forecast and assuming it means that total Intuit sales will miss their mark.
That could be a mistake, however.
Although the consumer group division is a big part of Intuit's business, accounting for 42% of sales last year, according to data from S&P Global Market Intelligence, it's still just a minority of total sales for the company. The small business and self-employed segment is actually larger at 50% of sales, and the strategic partner segment provides another 8% of sales. Intuit didn't say anything negative about either of those divisions. Assuming they hit their targets, and knowing that consumer sales were toward the top of the range management expected, I'd say there's still a good chance Intuit will "make its numbers" this year and accomplish that rarest of things: making investors happy about taxes.