You may think your tax rate is too high, but poor Travelzoo
It looks like folks are catching on to the staycation trend this summer; Travelzoo really had nothing to talk about, other than that ridiculous tax rate. Overall revenue was up 8%, as the company continues efforts to expand internationally. North American sales grew by a meager 3%, and operating profits dropped by 300 basis points year over year. European revenue increased by 71%, but operating losses increased by almost 67% as the company seeks to expand in France. Travelzoo is still looking to take off in Asia, with quarterly revenue of $90,000 and losses of $3.2 million.
As you can imagine, the overall financial picture for Travelzoo is absolutely horrendous. Its cost of goods sold skyrocketed by 183%, general and administration expenses increased by 104%, and sales and marketing costs jumped by 16.5%, with an overall increase in expenses of 37.6% on the 8% revenue increase. These numbers triggered a huge swing in profits per share, moving from a $0.17 profit last year to a $0.08 loss this year. Travelzoo couldn't write off its losses in Asia and Europe, driving taxes to that sky-high 168% effective rate.
Direct online travel providers such as Priceline.com
Travelzoo's stock price is down more than 70% from its 52-week high, and it isn't clear that the company has any positive growth opportunities in its future. Really, the only good news here is that the company has no long-term debt to weigh it down. Oh, and if you're not an investor, you'll at least be happy to note that Travelzoo is carrying more than its fair share of taxes.
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