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's happening: Shares of RetailMeNot (NASDAQ:SALE) were up 21.3% as of 11 a.m. Tuesday after the digital offers marketplace reported better-than-expected first-quarter results.
Quarterly net revenue fell 1% year over year to $60.4 million, which was well ahead of analysts' expectations for revenue of $58.7 million. RetailMeNot's result was bolstered by a 137% increase in mobile online transaction sales to $5.6 million, as well as a 100% increase in advertising and in-store revenue to $7.7 million. But it was also more than offset by a 14% decline in RetailMeNot's core desktop segment revenue to $47.1 million.
Meanwhile, RetailMeNot's adjusted earnings before interest, taxes, depreciation and amortization fell 13% to $18.7 million. Adjusted net income declined 15% to $10.8 million, and fell 13% on a per-diluted-share basis to $0.20. On the latter, keep in mind RetailMeNot spent nearly $24.5 million during the quarter to repurchase shares under a $100 million repurchase authorization approved in February. And again here, analysts were only expecting adjusted earnings of $0.14 per share.
Why it's happening: RetailMeNot CEO Cotter Cunningham explained his company made "solid progress" executing on its plans to increase mobile monetization.
"In 2015, we continue to focus on innovating and investing in our highest growth areas such as in-store and mobile," Cotter added, "increasing our audience of consumers coming directly to our marketplace, investing in a strong sales organization to deepen our relationships with retailers and looking for ways to help more consumers save money across the growing omni-channel landscape."
For the current quarter, RetailMeNot expects revenue of $55 million to $58 million, with adjusted EBITDA of $12 million to $14 million. Analysts' models called for higher second-quarter revenue of $58.9 million. For the full year 2015, RetailMeNot reiterated guidance for revenue of $275 million to $285 million, the midpoint of which sits slightly below analysts' expectations for 2015 sales of $281.9 million.
Of course, it's also worth noting RetailMeNot's first-quarter revenue and adjusted EBITDA both came in above the high ends of its previous guidance, so perhaps that's why the market is willing to forgive it for the slight guidance shortfall this time. In the end, as RetailMeNot continues to make progress in mobile and with shares trading at a reasonable 18.7 times next year's expected earnings, I think the market is right to celebrate RetailMeNot's solid quarter.
Steve Symington has no position in any stocks mentioned. The Motley Fool recommends American Express and RetailMeNot. The Motley Fool owns shares of Capital One Financial. and RetailMeNot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.