Vistaprint Financials Suffer From Strategy Shift
VENLO, THE NETHERLANDS—Vistaprint N.V., an online provider of professional marketing products and services to micro businesses and the home, announced financial results for the three month period ended March 31, the third quarter of its 2014 fiscal year.
"This is the first quarter in the past 14 years in which our revenue declined year over year," said Robert Keane, president and CEO. "While we are not content with this performance, our underlying value creation was much better than our headline financial numbers. Based upon significant customer research that we have conducted over the past three years we are shifting our value proposition away from the deep discounts and free-offer direct marketing that characterized the Vistaprint of the past toward being simply the best way for business owners to market their business. We are making this shift in order to expand into the large market opportunity that lies beyond our traditional base of highly price sensitive customers."
Keane continued, "This shift has been gaining momentum for more than two years and has created significant near-term revenue headwinds, but we persist in implementation because we believe in the long-term value of the strategy. The most impactful headwinds to date occurred in the past quarter. They were the result of changes to our pricing and marketing practices that we recently rolled out in our largest markets—the United States, Germany and United Kingdom. Since 2012 we have successfully tested similar changes in Canada but, as we described last August at our investor day, these types of changes typically cause an immediate revenue impact, the magnitude of which is difficult to project. In this past quarter, the headwinds were greater in the United States, Germany and United Kingdom, than we had anticipated.
Revenue for the third quarter of fiscal year 2014 was $286.2 million, a 1 percent decrease compared to revenue of $287.7 million reported in the same quarter a year ago. Excluding the estimated impact from currency exchange rate fluctuations, total revenue also decreased 1 percent year-over-year in the third quarter.