Wednesday, September 3, 2014

RetailMeNot Inc. (SALE) Q2 Earnings Preview: Trends Better Be Right Or Stock Will Be On Sale

RetailMeNot Inc. (NASDAQ:SALE) will report its second quarter 2014 financial results and business outlook on Monday, August 4, 2014 after market close. Following the release of the Company's financial results, Cotter Cunningham, CEO, and Doug Jeffries, CFO, will host a conference call to discuss the results and business outlook at 4:30 pm Eastern Time (3:30 pm Central Time) on Monday, August 4, 2014.  Additionally, in advance of the conference call, the Company will post second quarter 2014 management commentary and its second quarter key metrics and operating results presentation.

Wall Street anticipates that the digital coupon marketplace will earn $0.17 per share for the quarter, which is $0.02 less than last year's profit of $0.19 per share. iStock expects RetailMeNot to beat Wall Street's consensus number; the iEstimate is $0.18.

[Related -RetailMeNot Inc (SALE) Q1 Earnings Preview: Could Sail Past EPS and Revenue Estimates]

Sales, unlike earnings per share (EPS), are expected to move higher by a robust 38.8% year-over-year (YoY). The consensus revenue estimate for Q2 is $60.23 million versus last year's $43.40 million.

RetailMeNot, Inc. operates a digital coupon marketplace. Its marketplace connects consumers with retailers and brands. The company owns and operates digital coupon Websites, including RetailMeNot.com in the United States; VoucherCodes.co.uk in the United Kingdom; and Bons-de-Reduction.com, Poulpeo.com, and Ma-Reduc.com in France. Its Websites, mobile applications, email newsletters, alerts, and social media presence enable consumers to search for, discover, and redeem relevant digital coupons from retailers and brands for various product categories comprising clothing, electronics, health and beauty, home and office, travel, food and entertainment, personal and business services, and shoes.

[Related -Groupon Inc (GRPN): Why Weakness In Groupon Shares Is A Buying Opportunity?]

Since SALE is a web based business, checking our usual roster of online data resources for RetailMeNot.com can clue us in on how the quarter probably went.

According to quantcast.com, SALE shareholders better hope the numbers are wrong as the number of people who visited RetailMeNot.com dropped -39.6% in Q2 versus Q1. Last quarter, SALE's revenue came in at $61,270,000. It could be tough to hit $60,230,000 with 40% fewer visitors.

At the same time, pageviews per visitor increased by only 1.4% during the last three months. That's not going to be enough to make up for lost visitors, provided quantcast's figures are somewhat accurate, normally the margin of error is not that wide.

Now, we get a different picture from Google Trends' Search Volume Intensity (SVI). Average SVI for the keyword "RetailMeNot" increased 5.26% in the second quarter relative to the first and up 44% YoY, which opens up the possibility of a revenue and earnings surprise.

Overall: RetailMeNot Inc. (NASDAQ:SALE) better hope that SVI wins out over quantcast's visitors data otherwise shares could be on SALE. Investors might be cautious ahead of Monday's announcement with conflicting data. 

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