RetailMeNot shares dive on downbeat forecast


By Sony Kassam

Shares of RetailMeNot Inc. plunged Tuesday after the online coupon company revealed solid fourth quarter results – but cautioned investors that 2016 results will fall short of Wall Street forecasts.

In the latest quarter, the Austin, Texas-based company reported net income of $9 million, or 17 cents per diluted share, down 36 percent from net income of $14 million, or 32 cents per share, in the year-ago quarter.

Revenues slipped 4.9 percent to $83.1 million from $87.4 million in the year-ago quarter.

Excluding special items, RetailMeNot reported that adjusted earnings per share declined to 36 cents from 43 cents in the year-ago quarter; even with the decline, however, the digital marketplace company’s results topped the 28 cents per share analysts surveyed by Yahoo Finance had been expecting.

“While there were some highlights, overall we didn’t deliver as I had hoped,” said Cotter Cunningham, president and CEO of RetailMeNot, during a conference call Tuesday. “That’s disappointing, and frankly I expect more from the team here at RetailMeNot and especially myself.”

Investors shared Cunningham’s disappointment, as RetailMeNot shares fell $2.21, or 28 percent, to close at $5.81, in Nasdaq trading Tuesday.

The company said in its press release that officials now anticipate sales to reach between $49 million and $54 million in the first quarter of 2016, significantly below analysts’ average estimate of $56.8 million.

During the conference call, Cunningham stated the company has faced challenges in garnering strong online traffic from it’s website, The company’s online platform and mobile application connect consumers to retailers and brands through discounts.

RetailMeNot has continued to see the impact of declining desktop trends and a growing shift to mobile over the past few years. As a result, the company hopes to focus on improving its mobile app experience by using data for user personalization and enabling its advertising partners to optimize promotional programs.

“We have over 700 million people come to us on a trailing 12 months basis, that is such an enormous number,” Cunningham elaborated during the conference call. “And so getting those people to interact with us in different ways…offering the new products and showing them a variety of ways to interact with RetailMeNot, reducing friction and focusing on applying sort of a better content to that group is really the path forward.”

For full-year 2015, RetailMeNot had net income of $11.8 million, or 22 cents a diluted share, down from $27 million, or 49 cents a share, in the previous year. Revenues dropped to $249.1 million from $264.7 million.

RetailMeNot further announced that its board of directors authorized a $50 million increase in its stock repurchase program of the company’s outstanding common stock through February 2017.

Chief Financial Officer J. Scott Di Valerio said in the call, “We continue to believe that our stock repurchase program demonstrates our commitment to building stockholder value, as well as confidence in achieving long-term growth.”

Photo at top: Key figures from RetailMeNot’s 2015 fourth quarter earnings release.(Sony Kassam/MEDILL)