What happened
Shares of Cimpress (CMPR +0.67%), the printing company that owns VistaPrint and related businesses, were moving lower today after it reported disappointing results in its second-quarter earnings report.
As of 11:22 a.m. ET on Thursday, the stock was down 6.6%.
NASDAQ: CMPR
Key Data Points
So what
Revenue fell 1% to $845.2 million, missing estimates, though organic constant-currency revenue was up 5% from the quarter a year ago.
The company said the results were mixed, acknowledging currency headwinds and inflation in raw materials, energy, and labor. Vista, its biggest segment, which makes up roughly half of its revenue, was the worst performer with a 2% decline in reported revenue and a 13% decline in gross profit, showing the impact of higher costs and an unfavorable shift in product mix.
As a result, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 24% to $111.1 million.
And the company reported a loss of $5.34 per share on the basis of generally accepted accounting principles (GAAP). That was due in part to a $116.7 million noncash charge for a valuation allowance against a deferred tax asset, reversing an earlier benefit. The company did not report an adjusted profit figure.
Cimpress CEO Robert Keane also said that the company had named Florian Baumgartner as Vista CEO, replacing Keane after he served in that role for four years.
Now what
Cimpress didn't offer specific guidance for the current quarter or the rest of the fiscal year but did say that organic revenue growth had accelerated in January. It also said it planned to take steps to reduce its cost base to improve profitability. And it is targeting a return to its prior fiscal-year high of $400 million in adjusted EBITDA by fiscal 2024.
Given the cyclicality of the printing business, which is mostly a form of advertising, it's not surprising to see revenue growth slowing and profits falling. But the guidance should reassure investors that these are short-term headwinds that the company can overcome.
