The leading manufacturer and digital retailer of personalized
products and services,
) posted first-quarter 2013 loss of 33 cents per share, narrower
than the Zacks Consensus Estimate of 41 cents loss per share but
wider than the year-ago loss of 29 cents a share. However, the
company's loss per share bettered the management guidance of a
loss of 42 cents - 39 cents per share. Shutterfly usually reports
a loss in the first quarter of every year due to adverse
Additional costs related to Shutterfly's acquisitions of
Photoccino, Penguin Digital and This Life as well as increased
investments in technology and development headcount led to the
wider year-over-year loss in the quarter.
In the quarter under review, net revenue surged 28% year over
year to $116.7 million, which was ahead of the Zacks Consensus
Estimate of $110.0 million, induced by sturdy sales from both
Consumer and Enterprise categories. Revenues also came in
better than the management guidance of $107.2 - $110.0 million.
Healthy customer and transaction growth, sustained growth in
enterprise revenues and better-than-expected contribution from
photo-print business drove revenues in the quarter.
Behind the Headline Numbers
Revenues from the Consumers' category were $109.8 million in the
quarter, up 29.0% over the prior-year quarter buoyed by solid
performances of Cards & Stationery, Photo Books and Photo
Gifts product lines. Net Enterprise revenues grew 12.0% to $6.9
million in the quarter. Consumer engagement was strong during the
quarter as the company recorded a double-digit increase in
visits, registrations and uploads.
In the quarter, the total number of customers was 2.2 million,
reflecting an increase of 20.0% from the prior-year quarter.
Total orders generated were 3.4 million, up 20% year over year.
Average order value was $32.13, up 7% year over year. Several
promotional and pricing strategies implemented in the fourth
quarter of 2012 continued to help average order value.
Adjusted gross profit margin expanded 300 basis points from the
prior-year quarter to 50.0%, mainly due to higher unit volumes,
favorable product mix, higher average selling prices, several
efficiency initiatives and a somewhat lower mix of lower-margin
Shutterfly acquired one of the major players in the photo book
industry MyPublisher in the first quarter to integrate the
latter's photo book technology and highly specialized
manufacturing capabilities with its business.
Second Quarter Guidance
For the second quarter of 2013, Shutterfly expects net revenue
in the range of $118.0 - $121.2 million. The company expects to
incur a loss of 58 cents - 55 cents per share in the upcoming
ANGIES LIST INC (ANGI): Free Stock Analysis
GIANT INTERACTV (GA): Free Stock Analysis
SHUTTERFLY INC (SFLY): Free Stock Analysis
ZILLOW INC (Z): Free Stock Analysis Report
To read this article on Zacks.com click here.
For fiscal 2013, Shutterfly raised its expectation for net
revenue to a range of $766.0-$771.0 million from prior
expectations of $739.7-$746.0 million. On reported basis,
earnings are estimated to be between 20 cents - 30 cents per
share (down from 38 cents - 51 cents per share guided earlier).
Shutterfly continued its winning momentum even in the first
quarter of 2013, beating estimates for seven consecutive quarters
by significant margins. For the past few quarters, Shutterfly
remains a solid growth vehicle. The increased revenue guidance
reflects the company's strong fundamentals.
Apart from focusing on its core business, the company has been
very active on the acquisition front. Shutterfly recently
clinched deals to takeover MyPublisher, Eastman Kodak, FujiFilm,
Penguin Digital, Photoccino and ThisLife, which will likely prove
beneficial for the company over the long term. Shutterfly
currently holds a Zacks Rank #1 (Strong Buy).
Internet content companies that warrant a look include
Angie's List Inc.
Giant Interactive Group Inc.
). While Zillow carries a Zacks Rank #1 (Strong Buy), Angie's and
Giant carry a Zacks Rank #2 (Buy).