VistaPrint Limited (VPRT)
F2Q2013 Earnings Call
January 31, 2013 5:15 pm ET
Robert Keane - President, Chief Executive Officer and Chairman of the Management Board
Ernst Teunissen - Chief Financial Officer, Executive Vice President
Meredith Mendola - Vice President, Investor Relations
Youssef Squali - Cantor Fitzgerald
Brian Fitzgerald - Jefferies
Mark May - Barclays
Ben Hearnsberger - Stephens
Kevin Steinke - Barrington Research
Paul Bieber - Bank of America Merrill Lynch
Mitch Bartlett - Craig-Hallum
Kevin Kopelman - Cowen and Company
Andrew Ruud - Morgan Stanley
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Before we take the first call, as noted in the safe harbor statement at the beginning of the earnings presentation, comments may include forward-looking statements, including statements regarding revenue and earnings guidance and actual results may differ materially. Risks that could impact these statements are described in the documents that are periodically filed with the Securities and Exchange Commission.
Before we start with questions, I would like to turn the call over to Robert Keane a few brief comments.
Thank you, Keith and welcome to the call this evening. I hope by now you have had a chance to read through our earnings release and prepared information. For those of you who have not had that chance, I would like to provide a brief summary.
Our Q2 revenues were in line with expectations. They were a continuation of the recent trend of really mixed revenue performance by geography. Earnings per share was ahead of our expectations. We are 18 months into the execution of the long-term strategy we have publicly in 2011 and we have much to be proud of.
Our North American revenue performance has been strong and our manufacturing investments are improving product quality and production efficiency. Our technology investments are helping to improve our site experience around the world and we are better entertaining our customers through enhanced customer service.
However our revenue weakness in Europe persists. We believe this has resulted primarily from our own execution challenges. So we are working hard to overcome the growth challenges that we face there in Europe in the recent quarters. That said, a sustainable turnaround in Europe will take time.
In light of that, we have reduced our revenue outlook for fiscal 2013 by $30 million at the midpoint. However, we have narrowed our earnings per share guidance to the upper part of our prior guidance range. As stated in our prepared presentation, our continuing challenges in Europe have negatively impacted our long-term revenue outlook, so we no longer believe it is likely that we will achieve our original $2 billion organic revenue target in fiscal year '16, but we are still targeting our original 2016 net income guidance and we continue to believe there we have multiple leaders available to help us achieve significant margin leverage from '14 through fiscal '16.
This is due in part to some of the successful strategy execution I described earlier and talk about more in our prepared presentation as well as the investment trade-offs and expense management that we believe is good both for near-term but for long-term. I also want to make sure the people saw our decision to postpone our upcoming Investor Day and I would like to apologize for any inconvenience this may have caused. But we do believe that holding the event at the beginning of our new fiscal year when we have actually completed our normal annual planning cycle and evolved our plan to address the European challenges and our profit goals will produce higher-quality event for you, our investors.
Now we will take your questions.
(Operator Instructions) Now, we will proceed with the first call. It's from the line of Youssef Squali with Cantor Fitzgerald. Please go ahead.
Youssef Squali - Cantor Fitzgerald
Hi, thank you very much. Good afternoon, guys. Maybe two quick questions. First, Robert, on something you just said about your plans. Were the $2 billion goal in organic revenue by 2016 not achievable, but the EPS to be still achievable? I guess the first part to that question is, is there maybe a more realistic revenue goal by 2016 that you feel you can share with us at this point?
Second, it looks like by that statement that there is no quick fix to Europe. The understanding was that Europe was may be the 12 months to maybe 18 months behind the U.S. and at the end of the day, it will get fixed and we would start seeing some acceleration in revenue growth. Your confidence in that doesn’t seem to be there. So maybe you can you can speak to that point, please? And then I have a follow-up question.
Sure, Youssef. You are right that there is no quick fix to Europe that we see. We do believe that the long-term opportunity in Europe is very significant. We believe it is an important market and we are very committed to that. Frankly we do believe, in light of the work that we have done in the last six months and the new marketing team, really our Chief Marketing Officer who used to be the President of the North American business unit, who is running now Europe and I and the rest of the executive team realize and believe, in light of what we have been looking at, we have to work on a two track growth for the foreseeable future where we have North America running very well. We have Australia and New Zealand doing very well and APAC broadly doing very well.