Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Zulily (NASDAQ: ZU) were down 26% as of 2:40 p.m. Thursday after the online retailer released weaker-than-expected fourth-quarter results.
So what: Quarterly revenue climbed 52% year over year to $391.3 million, which translated to adjusted net income of $0.11 per share. Adjusted earnings before interest, taxes, depreciation and amortization simultaneously rose 14% to $20.3 million. Analysts, on average, were looking for adjusted net income of $0.14 per share on sales of $408.75 million.
Now what: For the current quarter, Zulily expects net sales between $300 million and $320 million, and adjusted EBITDA to be a loss of between $8 million and $2 million. Wall Street was modeling adjusted net income of $0.04 per share on significantly higher sales of $371 million.
For the full year 2015, Zulily sees net sales between $1.50 billion and $1.65 billion, and adjusted EBITDA between $55 million and $80 million. Analysts were expecting 2015 earnings and revenue of $0.41 per share and $1.76 billion, respectively.
Finally, Zulily's board also attempted to take some of the sting away by authorizing the repurchase of up to $250 million of zulily's common stock over the next two years. And the company has the means to do so having ended the year with roughly $373.8 million in cash and equivalents on its balance sheet.
As it stands, however, it's hard to blame the market for so aggressively bidding shares of Zulily down given its miss on both the the top and bottom lines in Q4, and on guidance for the coming year. For now, that's why I prefer to keep Zulily on my watchlist to see how it fares over the next few quarters.