RetailMeNot Inc (NASDAQ:SALE) will report its first quarter 2014 financial results and business outlook on Monday, May 5, 2014 after market close. Following the release of the Company's financial results, Cotter Cunningham, CEO, and Doug Jeffries, CFO, will host a conference call to discuss the results at 5:00 pm Eastern Time (4:00 pm Central Time).
Wall Street anticipates that the online coupon site will earn $0.19 per share for the quarter. iStock expects RetailMeNot to top Wall Street's consensus number. The iEstimate is $0.20, a penny to the plus side.
Sales are expected to increase, rising a sturdy 37.10% year-over-year (YoY). RetailMeNot's consensus revenue estimate for Q1 is $55.59 million, more than last year's $40.56 million.
RetailMeNot operates digital coupon marketplace, connecting consumers with retailers and brands. As of December 31, 2012, the Company had contracts with more than 10,000 paid retailers. The Company owns and operates digital coupon Websites in the United States (RetailMeNot.com) and the United Kingdom (VoucherCodes.co.uk).
In 2013, 96.5% of SALE's revenues were derived from commissions earned when consumers made purchases using digital coupons featured their websites and mobile applications, and 3.5% from advertising placements.
We've been covering a lot of internet service providers lately. It's been useful to look at web traffic and search trends for the brand, which has put iStock on the right side of the earnings reports more often – a lot more often than not.
According to Alexa.com's web traffic graph for SALE, traffic is up sharply YoY. Using data provided by Quantcast.com, the number of people visiting RetailMeNot is down 6.64% from the last quarter, which is to be expected after the holiday shopping season.
In Q4, RetailMeNot's revenue was $78.524 million. If traffic trends translate and revenue per person holds, then SALE could be in for a better quarter than expected. In the fourth quarter, we calculate that each person generated $4.89 in sales commissions.
If we apply that to the first quarter's 15,018,137 people – source quantcast – then commission would come in at $73 million, probably not going to happen. However, net revenue per visit fell at the end of 2013, and we expect something similar in Q1. Based on new math and our new revenue estimate is $62.43 million, probably not going to happened either.
That being said, traffic stats from two sources suggest more traffic than expected during the first quarter. If expected net-margin holds, then EPS could come in closer to $0.21.
Overall: Traffic is currency in the online world. If data from Alexa.com and Quantcast.com is somewhat accurate and SALE maintains 80% of its average revenue per visitor, then revenue and earnings should easily top expectations.
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