VistaPrint N.V. (VPRT) has reaffirmed its previously issued guidance for revenue and earnings per share for the second quarter ending Dec. 31, 2009 and full fiscal year 2010 ending Jun. 30, 2010, despite terminating its contract with an affiliate of Vertrue Inc.
VistaPrint’s guidance for the second quarter ranges between 55 cents and 60 cents per share on revenue of $167 million and $175 million. The earnings guidance for full fiscal year 2010 ranges between $1.85 and $1.95 per share on revenue of $615 million and $645 million.
The company has terminated its contract with an affiliate of Vertrue Inc., a consumer marketing firm, effective Dec. 20, 2009. It has also stopped offering membership rewards or similar programs from Nov. 23, 2009.
VistaPrint had already announced in early 2008 that third-party revenue from membership rewards programs will decline over time and might ultimately stop by the end of calendar 2010. This decision follows the company’s strategy of rapidly expanding its own product and services offerings and diversifying the types of non-membership third-party products and services made available to customers on its website.
Membership revenue comprised 2.3% of revenue in the first quarter of 2010, down from 6.2% in fiscal 2008. Hence, this termination of the Vertrue relationship and elimination of all membership program offerings is in line with the company’s strategy.
Additionally, the decision is prudent given the recent United States Senate Commerce Committee’s inquiry into a variety of membership rewards programs, including the sufficiency of their disclosures to consumers.
Following the reaffirmation of its guidance, the share price of VistaPrint increased $3.93 or 7.4% to $57.03 on Monday, and is up another 1.5% as of mid-day Tuesday.
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