Austin's RetailMeNot beats the Street in first quarter, but stock slides

Posted May 3rd, 2016

RetailMeNot  exceeded Wall Street expectations in the first quarter, but the company's stock still took a beating. 

Shares closed Tuesday down 10.1 percent, or 86 cents, at $7.64.

The Austin-based company also offered an outlook for the quarter that beat analysts' forecasts. 

"The first quarter of the year is off to a solid start, with total revenues and adjusted (earnings) coming in above the high end of guidance," said CEO Cotter Cunningham. "We continue to focus on being more than a coupon site, and we are succeeding."

Founded in 2009, RetailMeNot operates the largest online marketplace for coupons and consumer deals. Its sites and mobile apps provide coupon codes, free trials and other retail offers from more than 70,000 merchants including Macy's, Nordstrom, Wal-Mart and Target.

In April, the company acquired GiftCard Zen, a gift-card trading marketplace, for $22 million in cash and up to $11 million if certain targets are reached.

GiftCard Zen, based in Phoenix, operates a website that buys gift cards from users who don't want them -- for less than face value of the card -- and then resells them at a discount to users who do want the cards.

Cunningham said the company will make more investments in its mobile platform this year, and use data to make its product more personalized to users. It also will roll out a revamped food and dining offering on its app, he said.

In the first quarter, RetailMeNot reported a loss of $36,000, or zero cents a share, compared to a profit of $4.1 million, or 7 cents a share, in the same period a year ago. Excluding one-time items, the company had adjusted per-share earnings of 13 cents, down from 20 cents a year ago.

Revenue fell 9.5 percent to $54.6 million. The company had previously forecast revenue of $49 million to $54 million.

Analysts polled by Thomson Reuters had expected per-share earnings of 11 cents on revenue of $54 million.

For the current quarter, the company forecast consolidated net revenue in the range of $58.5 million to $64.5 million. Analysts had expected $51 million.

Cunningham said he didn't know why RetailMeNot's stock had tumbled, but noted that the markets overall were having a difficult trading day.

"There's nothing I'm aware of," he said. "We've talked to a number of analysts and one of them also asked why it's down. The market's having a tough day, although not as much as we are."