Discount hub RetailMeNot revealed a 5% year-on-year loss in net revenue for the final quarter of 2015, down to $83.1 million, whilst sharing some unfortunate guidance about how it sees itself beginning 2016.
The global firm’s portfolio is headed up by RetailMeNot.com in the US and RetailMeNot.ca in Canada, as well as other properties such as VoucherCodes.co.uk in the UK and RetailMeNot.de in Germany.
Q4 2015 saw the group weather through a 21% decline in desktop revenue ($52.4 million) which, due to it representing 63% of RetailMeNot’s overall takings, counterbalanced the 19% increase in the money it made through the redemption of offers on mobile devices ($9 million).
Another positive year-on-year increase was seen from in-store revenues, which rose 57% to $21.7 million – accounting for 26% of the money earned in Q4. However, the firm’s continued reliance on desktop looks to be harming its prospects.
After ending 2015 on a “positive note” as a result of the above readings coming in over guidance, RetailMeNot expects to see revenue of $49 million to $54 million for Q1 2016.
In the best case this would equate to a 11% drop against what it made in Q1 2015 and a 19% decline at the lowest end of the scale.
Merging online and offline
Financial news outlets have swarmed on the announcement, reporting ‘plummets’, ‘slumps’ and ‘dives’ in stock as a result of the guidance being announced. Most of these centre around a dip of roughly 17% on the basis of happenings at 12:00pm EST Tuesday.
Despite this, RetailMeNot will have plenty to build off in 2016 and will have taken great positivity off the back of its in-store performance.
This section of the business has been aided by the launch and development of its app, which lets consumers browse and redeem in-store offers via their mobile device.
Annual growth of 57% shows this area is clearly doing well for RetailMeNot. However, less certain is the pace at which its in-store business can offset the losses experienced on desktop.
Interestingly, desktop for RetailMeNot includes revenue on tablets, while its mobile performance is made up strictly of business conducted on smartphones.
Another area RetailMeNot is keen to see improving is its international business, made up of properties across the UK, Germany, Netherlands and France, which now account for 20% of its total net revenues.
This represents a 2% decline on the contribution it made in the previous quarter.
A failure to balance losses in key areas may provide justification as to the share price drop, as well as suggesting why guidance for revenue in the first quarter of this year has come in much lower than in previous quarters.
The last time RetailMeNot provided guidance on an impending quarter it was for Q4 2015, which was touted for a midpoint decline of 12% year-on-year based on expectations between $74 million to $76 million.