Shutterfly’s Q1 2017 loss of $0.84 per share was narrower than the Zacks Consensus Estimate loss of $1.03 and the prior-year quarter loss of $0.85 per share. Net revenue increased 6% year over year, supported by strong performance of the flagship Shutterfly brand. Also, revenues beat the consensus mark by 1.6%. Shutterfly’s focus on improving operational efficiency through major restructuring bodes well for the long term. Product innovations and improving technology-related offerings are expected to be solid growth drivers. However, Shutterfly’s shares have underperformed the Zacks categorized Internet Content industry over the past 1 year. Also, Shutterfly is expected to incur huge restructuring costs in 2017 and revenue growth is likely to be slow. A rise in manufacturing, labor and training costs could also weigh on margins. Susceptibility to seasonality, travel industry and consumer spending trends also remain headwinds.