Zulily Shares Plummet 21% As Q4 Results Miss Estimates, Weak Outlook

(RTTNews) - Shares of Zulily, Inc. (ZU) plunged more than 21 percent in extended trading on Tuesday after the online retailer reported results for the fourth quarter that missed analysts' expectations. The company also provided sales guidance for the first quarter and full-year 2014, both below Street view.

However, the company reported a profit for the fourth quarter that more than doubled from last year, despite higher operating expenses, reflecting strong double-digit sales growth amid improved orders and value per order.

Zulily, formerly known as BSI Holdings Inc., was founded in 2009 by Mark Vadon, who owns a 30 percent stake in the company. CEO Darrell Cavens also owns about 20 percent. The company went public in November 2013.

The Seattle, Washington-based e-commerce company reported net income attributable to common stockholders of $10.88 million or $0.08 per share for the fourth quarter, higher than $4.53 million or $0.05 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $14.90 million or $0.11 per share, compared to $15.63 million or $0.12 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report a loss of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter nearly surged 52 percent to $391.35 million from $257.03 million in the same quarter last year, but missed twelve Wall Street analysts' consensus estimate of $406.55 million.

Zulily's active customers were 4.6 million at the end of the quarter, up 54 percent from the same period of the prior year. Total orders placed surged 42 percent year-over-year to 6.8 million for the quarter, with average order value edging up 3 percent to $58.09 from last year.

"We closed out the year with significant growth across the business. We increased year-over-year net sales by 72% and drove strong profitability," Cavens said in a statement.

Looking ahead to the first quarter, Zulily forecasts net sales between $300.0 million and $320.0 million. Analysts expect the company to report revenues of $371.03 million for the quarter.

For fiscal 2015, Zulily continues to expect revenues between $1.50 billion to $1.65 billion. Street is currently looking for full-year 2015 annual revenues of $1.75 billion.

"Our goal is to build zulily into one of the most innovative and profitable consumer retail internet businesses of our tim. We have set clear business priorities for 2015 that will create an even better experience for our customers while also leveraging the strong unit economics that we've been building in the business to continue to deliver surprise and delight to our customers each day," Cavens added.

ZU closed Tuesday's regular trading session at $19.89, up $0.18 or 0.94% on a volume of 4.76 million shares. However, the stock plummeted $4.24 or 21.32% in after-hours trading.