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Shutterfly (SFLY) Q1 Loss Narrower than Expected, Sales Beat
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Shutterfly, Inc. posted narrower-than-expected loss in the first quarter of 2017. Revenues also beat estimates.
Quarter in Detail
Generally, this personalized products and service provider’s business is highly seasonal and incurs losses in the first three quarters of the year.
Shutterfly posted a loss of 84 cents per share in the first quarter, narrower than the Zacks Consensus Estimate of a loss of $1.03 and the company’s projected loss range of $1.00 to 95 cents. The reported figure was also slightly narrower than the prior-year quarter loss of 85 cents per share. The improvement came on the back of a higher top line.
Net revenue increased 6% year over year to $192.0 million and was higher than the guided range of $185.0 million to $190.0 million. In fact, the first-quarter earnings season marked the 65th consecutive quarter of year-over-year net revenue growth. Moreover, revenues surpassed the Zacks Consensus Estimate of $188.9 million by 1.6%.
Revenues of the company benefited from the strong performance of the company’s flagship Shutterfly brand, which was driven by the home décor, personalized gift and photo books categories. This was partially offset by weaker performances at the non-Shutterfly brands including Tiny Prints and Wedding Paper Divas.
Revenues from the Consumers category were up 3% year over year to $160.7 million, backed by high single-digit growth at the Shutterfly flagship brand. Meanwhile, Shutterfly Business Solutions (‘SBS’) segment revenues jumped 19% to $31.3 million.
While the total number of unique customers was up 1% year over year to 3.4 million, total orders generated were essentially flat at 5.5 million. Additionally, average order value was $29.02, up 3% from the year-ago quarter, driven by a favorable product mix.
Operating expenses totaled $116.6 million (excluding restructuring charges of about $7.7 million), increasing 2% year over year. This was because rise in technology and development costs were partially offset by a decline in general and administrative expenses as well as sales and marketing expenses.
Adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) was at loss of $1.9 million, improving 25% year over year. This reported figure was well above the guidance of a loss of $7 million to $4.5 million.
Shutterfly, Inc. Price, Consensus and EPS Surprise
For the second quarter of 2017, the company expects to incur loss per share in the range of 55 cents to 50 cents. The Zacks Consensus Estimate of a loss of 50 cents per share falls toward the higher end of the guided range.
Net revenue is expected in the range of $205.0 million to $212.0 million, a year-over-year increase in the band of 0.5% to 3.9%.
Gross profit margin is expected within 43.0% to 43.5% of net revenue. Adjusted EBITDA is expected in the range of $14.0 million to $17.5 million.
2017 Guidance
The company reaffirmed its previously issued guidance for 2017.
The company continues to expect earnings of 45 to 80 cents per share in 2017. The Zacks Consensus Estimate of 54 cents per share falls within the guided range.
Net revenue is still expected in the range of $1.135 billion to $1.165 billion, a year-over-year increase of 0.4% to 3.1%. Adjusted EBITDA is anticipated to be in the band of $210.0 to $230.0 million, as expected earlier.
Gross profit margin is projected in the range of 49.0% to 50.0% of net revenue, in-line with the previous expectation.
Zacks Rank and Stocks to Consider
Shutterfly currently carries a Zacks Rank #3 (Hold).
YY’s current quarter and current year earnings estimates have moved up 21.2% and 9% respectively, over the last 60 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RELX carries a Zacks Rank #2 (Buy). Its current year earnings estimate has risen by 1% in the past two months.
Weibo’s full-year 2017 growth estimate is pegged at 157.3% compared with the industry average of 16.3%. This company also holds a Zacks Rank #2.
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Shutterfly (SFLY) Q1 Loss Narrower than Expected, Sales Beat
Shutterfly, Inc. posted narrower-than-expected loss in the first quarter of 2017. Revenues also beat estimates.
Quarter in Detail
Generally, this personalized products and service provider’s business is highly seasonal and incurs losses in the first three quarters of the year.
Shutterfly posted a loss of 84 cents per share in the first quarter, narrower than the Zacks Consensus Estimate of a loss of $1.03 and the company’s projected loss range of $1.00 to 95 cents. The reported figure was also slightly narrower than the prior-year quarter loss of 85 cents per share. The improvement came on the back of a higher top line.
Net revenue increased 6% year over year to $192.0 million and was higher than the guided range of $185.0 million to $190.0 million. In fact, the first-quarter earnings season marked the 65th consecutive quarter of year-over-year net revenue growth. Moreover, revenues surpassed the Zacks Consensus Estimate of $188.9 million by 1.6%.
Revenues of the company benefited from the strong performance of the company’s flagship Shutterfly brand, which was driven by the home décor, personalized gift and photo books categories. This was partially offset by weaker performances at the non-Shutterfly brands including Tiny Prints and Wedding Paper Divas.
Revenues from the Consumers category were up 3% year over year to $160.7 million, backed by high single-digit growth at the Shutterfly flagship brand. Meanwhile, Shutterfly Business Solutions (‘SBS’) segment revenues jumped 19% to $31.3 million.
While the total number of unique customers was up 1% year over year to 3.4 million, total orders generated were essentially flat at 5.5 million. Additionally, average order value was $29.02, up 3% from the year-ago quarter, driven by a favorable product mix.
Gross margin (excluding restructuring charges) decreased 70 basis points (bps) to 39.5%.
Operating expenses totaled $116.6 million (excluding restructuring charges of about $7.7 million), increasing 2% year over year. This was because rise in technology and development costs were partially offset by a decline in general and administrative expenses as well as sales and marketing expenses.
Adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) was at loss of $1.9 million, improving 25% year over year. This reported figure was well above the guidance of a loss of $7 million to $4.5 million.
Shutterfly, Inc. Price, Consensus and EPS Surprise
Shutterfly, Inc. Price, Consensus and EPS Surprise | Shutterfly, Inc. Quote
2Q17 Earnings Outlook
For the second quarter of 2017, the company expects to incur loss per share in the range of 55 cents to 50 cents. The Zacks Consensus Estimate of a loss of 50 cents per share falls toward the higher end of the guided range.
Net revenue is expected in the range of $205.0 million to $212.0 million, a year-over-year increase in the band of 0.5% to 3.9%.
Gross profit margin is expected within 43.0% to 43.5% of net revenue. Adjusted EBITDA is expected in the range of $14.0 million to $17.5 million.
2017 Guidance
The company reaffirmed its previously issued guidance for 2017.
The company continues to expect earnings of 45 to 80 cents per share in 2017. The Zacks Consensus Estimate of 54 cents per share falls within the guided range.
Net revenue is still expected in the range of $1.135 billion to $1.165 billion, a year-over-year increase of 0.4% to 3.1%. Adjusted EBITDA is anticipated to be in the band of $210.0 to $230.0 million, as expected earlier.
Gross profit margin is projected in the range of 49.0% to 50.0% of net revenue, in-line with the previous expectation.
Zacks Rank and Stocks to Consider
Shutterfly currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Internet - Content industry include YY Inc. (YY - Free Report) , RELX PLC (RELX - Free Report) and Weibo Corporation (WB - Free Report) .
YY’s current quarter and current year earnings estimates have moved up 21.2% and 9% respectively, over the last 60 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RELX carries a Zacks Rank #2 (Buy). Its current year earnings estimate has risen by 1% in the past two months.
Weibo’s full-year 2017 growth estimate is pegged at 157.3% compared with the industry average of 16.3%. This company also holds a Zacks Rank #2.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>