Zulily Shares Tumble On Q1 Adj. Loss, But Lifts Full-year Revenue Outlook

(RTTNews) - Shares of Zulily, Inc. (ZU) tumbled more than 17 percent in extended trades Tuesday after the online retailer reported an adjusted loss for the first quarter, while analysts expected an adjusted profit, though revenues beat estimates. In addition, the company forecast revenues for the second quarter above Street expectations and raised its revenue outlook for fiscal 2014.

Zulily's results come as it strives to compete in a highly competitive marketplace dominated by the likes of Amazon.com Inc. (AMZN) and eBay Inc. (EBAY). The company's adjusted earnings results for the latest quarter were hurt by a surge in order backlogs that delayed the shipping of items and resulted in longer average shipment time.

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 owns about 20 percent. The company went public in November 2013.

Zulily's net loss for the first quarter was $2.95 million or $0.02 per share, narrower than loss of $4.13 million or $0.09 per share in the previous-year quarter.

Adjusted net loss for the quarter was $2.95 million or $0.02 per share, compared to adjusted net loss of $1.60 million or $0.01 per share in the year-ago period.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.

However, net sales for the quarter grew 87 percent to $237.88 million from $127.01 million in the same period last year. Analysts had a consensus revenue estimate of $233.58 million for the quarter.

Total operating expenses for the quarter were $66.69 million, up 74 percent from the prior-year quarter.

Zulily's active customers were 3.7 million at the end of the quarter, up 93 percent from the same period of the prior year. Total orders placed surged 91 percent year-over-year to 5.5 million for the quarter, while average order value increased 4 percent to $55.34.

Looking ahead to the second quarter, Zulily forecasts earnings results in a range of loss of $2.0 million to profit of $3.0 million, and net sales between $261.0 million to $276.0 million. Analyst expects the company to report earnings of $0.05 per share for the quarter on revenues of $248.54 million.

For fiscal 2014, Zulily now forecasts net income before provision for income taxes in a range of $15.0 million to $25.0 million. The company projects full-year net sales in a range of $1.15 billion to $1.20 billion, up from the prior range of $1.10 billion to $1.15 billion. Analysts currently expect revenues of $1.15 billion for the year.

ZU closed Tuesday's regular trading session at $45.89, down $2.56 or 5.28 percent on a volume of 2.51 million shares. In after-hours, the stock further declined $7.88 or 17.17 percent to $38.01.