This is not how Zulily hoped to celebrate its fifth anniversary. The Seattle-based online retailer — founded five years ago this month by Blue Nile vets Darrell Cavens and Mark Vadon — is seeing its stock continue to tumble amid Wall Street fears that revenues will not hit targets.
Just today, analyst firm ITG Research cut its revenue projections for the company, estimating that revenue will come in for the fourth quarter at $395 million, short of the of consensus of $410.9 million.
As a result, the stock is spiraling, with the shares down more than six percent today. Zulily is now trading at $18.53 — below the company’s IPO price of $22 per share.
The stock hit a high of nearly $70 per share, just 11 months ago. But since then, it has been a steady downfall for the company, which sells housewares, baby and kid products and apparel and accessories for women. The stock took a tumble last November when it struggled with sending its daily emails out to prospective customers.
In addition, Cavens told Forbes earlier this month that Zulily would consider closing its U.K. office. The company would continue to service the U.K, just doing so from its fulfillment centers in the U.S.
“We’re going through that exercise now and we’re trying to figure that out,” Cavens said. “We’re thinking about how we can bring in goods cross-border. It could result in us shutting down our U.K. office.” About 50 people work in the U.K. office.
Zulily has always been a bit of an oddity when it comes to online retail since it does not stress fast shipping times and does not place a lot of weight on holiday sales. At the GeekWire Summit last October, Chairman Mark Vadon said that the company is misunderstood by Wall Street.
“They don’t understand what’s motivating our customers,” he said. “They think it has to be low-priced, and a commodity, and that you have to get it to them fast — two-day is good, one day is better and same-day is best.”
Regardless, even with the recent struggles, Zulily’s growth has been quite impressive over the years — as the accompanying chart shows.
The question remains: Is this minor growing pains or is something deeper going on?