Breaking Finance News

LightInTheBox Isn’t Shining So Brightly After Reporting an Earnings Miss (LITB)

2758679705_67c56b3065_bIt’s not so much about the numbers as it is expectations. LightInTheBox (NYSE: LITB) has been the prettiest girl in the room when it comes to China stocks but today, she lost some her luster.

The company reported EPS of $0.10 versus consensus of $0.06 but revenue came in light at $72.2 million versus estimates of $75.8 million. But what really turned the lights out on this stock was its outlook. The company said that it sees Q3 sales coming in at $68 million to $70 million. The street was expecting $78.5 million.

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Other Highlights Include:

  • Adjusted operating income margin improved to 5.4% from 0.0% in the prior year period.
  • Revenue missed expectations but it rose 53 percent year over year.
  • Net income for the second quarter of 2013 was $0.6 million, compared to a net loss of $1.4 million in the same quarter of 2012.
  • Revenue attributed to repeat customers increased 123.7% to $23.4 million from the same quarter of 2012.

Mr. Alan Guo, Chairman and CEO of LightInTheBox, stated, “We are excited to report second quarter 2013 financial results which reflect continued strong growth momentum and margin expansion. During the quarter, we grew net revenues by 52.6% year over year and our total number of customers increased by 140.0% to 1.2 million, demonstrating the growing awareness of our online retail platform. We expanded our geographic presence in all regions, led by triple digit percentage growth in both Europe and South America, notably from Russia and Brazil. We are particularly pleased with our year-over-year and sequential adjusted net income improvements driven by the continuing optimization of repeat customer purchases and effective cost controls.”

This is clearly an expectations miss and expectation misses are prime opportunities for value investors. With the stock down 35 percent today, this could be the perfect entry point on Thursday. (Give the stock a few days to stabilize)

A word of caution–Chinese stocks are difficult to research and the complexities of the Chinese government can make it difficult to have clear grasp of the risk involved in names like these.

Company Profile

LightInTheBox Holding Co., Ltd., through its subsidiaries, operates as an online retailing company. The company provides apparel products, including special occasion apparel, such as wedding dresses, bridesmaid dresses, groom wear, cocktail dresses, formal evening wear, graduation dresses, and accessories, as well as women’s apparel under the Three Seasons/TS brand; and small accessories and gadgets comprising video game accessories, tablet computer and computer gadgets, electronics gadgets, electronic cables, car accessories, cell phone accessories, flashlights, lights, home and office gadgets, batteries, gifts and party supplies, toys, and travel kits, as well as headsets and chargers, and home theater system accessories.

It also offers home and garden products consisting of faucets, lighting fixtures, paintings, portable home appliances, bathroom fixtures, door and window fixtures, and various types of furniture products; electronics and communication devices that include tablet computers, car electronics, security systems, portable music and DVD players, projectors, cell phones, short-wave radios, virtual display glasses, and music player sunglasses; and other products, which comprise beauty products, such as make-up supplies, wigs, footbaths, and ultrasonic cleaners, as well as sports and outdoors products.

The company provides its products through operating lightinthebox.com, miniinthebox.com, and other Websites worldwide. LightInTheBox Holding Co., Ltd. was founded in 2007 and is headquartered in Beijing, the People’s Republic of China.

[stock-tools exchange="NYSE" symbol="LITB" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author had no position in the company mentioned.

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2 Comments

  1. Henry Hill

    August 23, 2013 at 7:11 pm

    124% growth in repeat customer revenue this quarter – one of the positives out of earnings this week http://stks.co/dfvb

  2. Ming

    August 27, 2013 at 4:46 am

    The Chinese online discount retailer that sold shares in the United States this year, risks reducing the price for the nation’s companies seeking to go public.