Shutterfly’s Q3 sales grow 18%

November 2, 2015 11:50 AM

Shutterfly Inc., the online retailer of scrapbooks and other photography services, reported an 18.0% increase in revenue in the third quarter, to $167.5 million from $142.0 million in the year-ago period.

Business-to-business sales, which accounted for 18% of Q3 revenue, doubled to $29.5 million and contributed to Shutterfly’s double-digit growth, CEO Jeffrey Housenbold told analysts last week.

Average order value declined 16% since the third quarter of 2014, to $25.83 from $30.63. The online retailer attributed the decline in part to the acquisition of GrooveBook in November 2014. Average order value, excluding GrooveBook, declined 6% to $29.17 from $31.07.  GrooveBook is an app that monthly subscribers can use to create a photobook on their smartphone and have it printed and shipped for $2.99. Shutterfly also said, “The average order value is typically lower in the third quarter due to promotional activity to generate engagement leading into fourth quarter.”

Average order value does not include the B2B sales, which Shutterfly calls “enterprise” sales. B2B sales grew 100.3% to $29.5 million from $14.7 million in Q3 2014. In the earnings call, Housenbold told analysts that “investments made in the enterprise platform are already paying off.”

Shutterfly last week also announced that chief financial officer Brian Regan is leaving the company to join a private equity firm and will be replaced by Mike Pope, effective Nov. 6. “Mike is a Silicon Valley veteran who has a successful track record of profitably growing public and private companies as both a chief financial officer and chief operating officer,” Housenbold said.

For the quarter ended Sept. 30, Shutterfly, No. 50 in the Internet Retailer 2015 Top 500 Guide, reported:

  • Net revenue of $167.5 million, up 18.0% from $142.0 million in Q3 of 2014.
  • Sales to consumers totaled $138.0 million, up 8.4 % from $127.3 million.
  • B2B sales totaled $29.5 million, a 100.3% increase year over year from $14.7 million.
  • The number of orders increased to 5.34 million, up 28.4% from 4.16 million.
  • The number of customers grew to 3.11 million, up 23.4% from 2.52 million.
  • Net loss of $45.1 million compared with a net loss of $34.2 million in the same quarter last year.



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