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News Breaks
March 14, 2014
11:07 EDTXOXOXO Group slides after reporting lower than expected earnings
Shares of women's media and technology company XO Group (XOXO) are sliding after the company reported lower than expected fourth quarter earnings last night. WHAT'S NEW: XO Group reported fourth quarter adjusted earnings per share of 2c, which was below analysts' consensus forecast of 11c per share. The company reported fourth quarter revenue of $32.6M, falling short of analysts' estimates of $33.9M. XO Group also announced that it appointed Michael Steib as its new CEO and said Co-Founder David Liu will continue guiding the company's overall direction as Chairman of the board. WHAT'S NOTABLE: During the company's earnings conference call last night, XO Group said it expects revenue growth rates will be consistent with the previous five years. The company said it "remains cognizant" that it will take time for the cumulative momentum of its efforts to manifest in more substantial year-over-year growth rates. The company also said its China business continues to be in investment mode and has long-term promise. XO Group expects to allocate resources to this business, likely at similar levels as it did in FY13. ANALYST REACTION: Earlier today, B. Riley downgraded XO Group from Neutral to Buy following the company's fourth quarter results. The firm lowered its price target on the stock to $10 from $15. PRICE ACTION: During morning trading, shares of XO Group slid $1.93, or 16.22%, to $9.97.
News For XOXO From The Last 14 Days
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October 24, 2014
06:18 EDTXOXOXO Group to cease operations at Redding, California warehouse
XO Group committed to a plan to cease operations at its warehouse in Redding, California. The company informed impacted employees on October 23, 2014, and the process of the warehouse closure is expected to be completed by end of the first quarter of 2015. This decision is the result of a rigorous examination to enhance the financial contribution of the Company’s eCommerce fulfillment operations and furthers the Company’s focused transformation to a digital marketplace. The company intends to continue to serve the eCommerce needs of its users through a registry and partner-based model for providing users with desired products and services. The decision to cease operations at the Redding warehouse took into account that the company’s manufacturing operations have experienced significant revenue declines over the past three years, and the company expected that the manufacturing operations would have continued to experience declines. Approximately 72 full-time employees and 39 part-time employees will be impacted. The actions are expected to reduce operating costs by approximately $6M-$7M, annualized, directly related to these fulfillment operations, after the completion of the warehouse closure. The company estimates that gross profit from the current eCommerce operation would have been approximately $5M in 2015. The company estimates that it will incur pre-tax costs in the aggregate amount of approximately $2.5M-$3.5M during the fourth quarter of 2014 and the first quarter of 2015. The costs to be incurred relate primarily to severance, asset impairment, accelerated lease expense and disposal costs related to the warehouse closure. Approximately $1M-$1.5M of these charges are expected to be cash-based.

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