Cimpress NV, parent company of Vistaprint and other personal product brands, reported healthy first-quarter top-line growth 5% (including the impact of currency changes and results of acquisitions and divestitures) but operating income continues to be under pressure.
The company reported income of $589 million in the quarter, compared to $563 million last year. The company’s operating loss was $5.9 million, compared to $46.6 million income in the same year-prior quarter.
Vistaprint’s revenue growth rate declined to 7% from 9% the quarter prior, to $337 million.
“Even though we expect fluctuations in the growth rates of our businesses from quarter to quarter, we are disappointed with Vistaprint’s Q1 FY2019 constant currency revenue growth. Drivers of the slower constant- currency growth included a decline in new customer bookings due in part to marketing experimentation, increasing mobile traffic that negatively impacts conversion rates, the effects from the expanded rollout of a major technology change, and lower growth rates for some of our newer products as we work to optimize their profitability,” the company said. “Despite weaker revenue growth, segment profit in Q1 FY2019 increased by $16.4 million year over year, and segment profit margin was up 440 basis points compared to the year-ago period.”
In a letter to shareholders, Robert S. Keane, founder and CEO, reiterated the company is aligned to deliver long-term results, but still said the company was “disappointed with our revenue growth this quarter and are taking actions to address this while also extending the consistent progress we have been making in the operational and strategic initiatives that we discussed at our annual investor day in August”
This quarter we delivered growth below those expectations for our two largest reporting segments, Vistaprint and Upload and Print, and only just above the bottom of the range for National Pen. Via initiatives underway across Cimpress, we are working to resolve the underlying issues and to deliver the revenue growth expectations previously outlined in that letter.
Read the full quarterly report here.