April 28, 2011, 11:07 AM

E-retailer Shutterfly books a 25% increase in Q1 revenue

The online photo processor also reported a 25% gain in customers making purchases.

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Online snapshot processor and photo album retailer Shutterfly Inc. has reported a 25% increase in revenue in the first quarter of 2011, and a similar increase in the number of consumers making purchases during the quarter.

Shutterfly also disclosed this week that it had closed its previously announced acquisition of Tiny Prints, which sells cards, invitations, personalized stationery and photo books.

"We began 2011 with a quarter of solid execution led by growth in our Photo Books and Cards and Stationery categories. Capitalizing on our strong product line-up, deep customer insights and our loyal and active customer base, we increased net revenues 25% year-over-year," says Shutterfly president and CEO Jeffrey Housenbold. "We are also very excited to welcome the entire Tiny Prints team and look forward to building the world's most comprehensive selection of online cards and stationery products and advancing our brands as the leaders in this market."

For the first three months of 2011, Shutterfly, No. 67 in the Internet Retailer Top 500 Guide, reported:

  • Revenue increased 25% to $57.23 million from $45.74 million in the first quarter of 2010.
  • Personalized products and services accounted for $40.8 million in revenue, up 34% year over year, while print revenue totaled $14.1 million, up 3%. The remaining $2.3 million came from commercial print revenue.
  • The number of transacting customers grew 25% to 1.34 million from 1.07 million.
  • Orders increased 23% to 2.06 million from 1.67 million.
  • Average order value increased 1% to $26.64 from $26.43.
  • The number of orders per customer declined to 1.5 from 1.6 for the quarter.
  • Net loss increased 64% to $7.76 million from $4.73 million.

Shutterfly projects revenue for the second quarter of $68 million to $72 million and for the year $468 million to $478 million. Shutterfly’s 2010 sales totaled $307.7 million, up 25% from 2009.

Following the report, Lazard Capital analyst Colin Sebastian raised his target price for Shutterfly shares to $70 from $46, calling Shutterfly and Tiny Prints “a compelling combination.” “We continue to view Shutterfly as increasingly well positioned to consolidate market share in an attractive digital media category, and when the acquisition dust settles, Shutterfly should emerge strong and more profitable,” Sebastian writes in a note to investors.

Shutterfly’s shares were up 7% in mid-day trading today.

Sebastian will speak at the Internet Retailer Conference & Exhibition 2011 in a session entitled "How does Amazon do it? An in-depth look at e-retailing's pacesetter."

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