By segment, the company reported, “Vistaprint saw continued growth in repeat customer bookings for the third quarter of FY 2018; however new customer bookings decreased in constant currencies due in part to reduced advertising spend as a percent of revenue. The timing of the Easter holiday also negatively impacted Q3 growth, which was 7% in constant currencies. Vistaprint’s constant-currency growth on a two-year stacked basis has been consistent over the past several quarters. Year-to-date Vistaprint revenue growth was 12% on a reported basis and 9% in constant currencies.”
Vistaprint had revenues of $290 million in the quarter, with $45.6 million segment profit. The company is also moving more of its production in-house:
As discussed at our investor day last August, one of Vistaprint’s objectives is to optimize the large number of new products and services that were launched in fiscal 2017 and that we continue to launch in fiscal 2018. We believe that there are pricing and operating levers to improve the profitability of these products over time. That effort is underway, and while we are already seeing some positive indicators that these efforts are making a difference, it will take time to scale and transition those new products and services from investments to cash generative business. While these investments in new products and services put pressure on near-term profitability, we expect they will continue to help us attract higher-value customers and improve customer loyalty and, over time, deliver attractive returns on our investment. During the third quarter, we began to shift production of several of these newer products from third parties to our own plants.
In the Upload and Print category – comprised of brands like Exaprint, Easyflyer and Pixartprinting – saw revenues decline to $116 million, compared to $142 million in the year-ago quarter, but category profits grew $4 million to $15 million. The company said it is continuing to drive operating efficiencies in this sector as well:
Segment Profit in Q3 FY 2018 was up by $4.4 million year over year due primarily to growth in gross profit dollars and operating expense efficiencies in several businesses as well as currency benefits, partially offset by increased investments in technology. Segment Profit margin increased 40 bps year over year.
We continue to see evidence that the January 2017 decentralization is driving the desired impacts within our Upload and Print businesses. This is primarily due to tighter cross-functional connections of marketing, technology, manufacturing and service teams, allowing the businesses to be more agile and work faster. We continue to see opportunities to shift production of certain products to lower-cost and/or higher-quality options through the mass customization platform. The current benefits remain relatively small, but we expect them to begin to grow through Q4 and in FY 2019.