Cimpress' (CMPR) Q2 Earnings Beat Estimates, Revenues Miss

Cimpress N.V. (NASDAQ:CMPR) reported mixed second-quarter fiscal 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same.

The company’s adjusted earnings came in at $2.73 per share, surpassing the Zacks Consensus Estimate of $2.25. Moreover, the bottom grew 25.8% from the year-ago quarter figure of $2.17.

Quarter Details

Total revenues in the fiscal second quarter were $820.3 million compared with $825.6 million a year ago. Also, the top line missed the consensus estimate of $841 million.

National Pen segment generated revenues of about $128 million, down 3.8% year over year. Vistaprint — the largest revenue generating segment of the company — reported aggregate revenues of $433.3 million, down from $443.9 million.

Upload and Print segment’s revenues increased to $214.1 million from $203.8 million in the year-ago quarter. The segment consists of two subgroups — PrintBrothers and The Print Group. PrintBrothers’ revenues increased to $126.6 million from $116.3 million, whereas The Print Group generated $87.7 million, roughly flat year over year. Moreover, revenues from All Other Businesses increased to $49.8 million from $48.3 million.

Margin Details

In the quarter, Cimpress' cost of revenues was $394 million, down 4.3% on a year-over-year basis. It represented 48% of total revenues. Total selling, general & administrative expenses declined 10.2% to $225.2 million. It represented 27.5% of revenues in the fiscal second quarter.

Gross profit increased 2.9% year over year to $426.3 million, with margin expanding 180 basis points to 52%. Net interest expenses fell 6.5% to $15.7 million.

Balance Sheet and Cash Flow

As of Dec 31, 2019, Cimpress had $36.9 million in cash and cash equivalents compared with $48.3 million in the prior-year quarter. Also, the company’s total debt (net of issuance costs), was $1,370.3 million, up from $1,048.4 million.

In the fiscal second quarter, Cimpress repurchased 2,279,736 shares for $305.3 million. Net cash provided by operating activities was $202.2 million, higher than $183.3 million in the year-ago quarter.

Outlook

For fiscal 2020, the company estimates National Pen’s sales growth to be in the range of flat-to-low single-digit (at constant currency), while the same for Vistaprint is projected to be in the range of flat-to-negative.

Zacks Rank & Stocks to Consider

Cimpress currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Barnes Group, Inc. (NYSE:B) , Berry Global Group, Inc. (NYSE:BERY) Cintas Corporation (NASDAQ:CTAS) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barnes Group delivered positive earnings surprise of 4.21%, on average, in the trailing four quarters.

Berry Global delivered positive earnings surprise of 0.70%, on average, in the trailing four quarters.

Cintas pulled off positive earnings surprise of 8.50%, on average, in the trailing four quarters.

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