Cimpress plc (NASDAQ:CMPR) Q2 2023 Earnings Call Transcript

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Robert Keane: Well, first of all €“ cost savings makes sense given the macro uncertainty. We certainly talked about that in our prepared comments that we released last night. So some of the growth in headcount comes because we are growing in our Upload and Print businesses, but if I focus on Vista, there are roles that impact our operating expenses and our fixed costs. So in the plants, in customer care €“ strictly year-over-year in the quarter. We also have significantly curtailed hiring across the different roles and in the Cimpress central teams as well and actually reduced those back in June. Now the data that we provide is still related to Vista, our headcount is up, but that is really because of the staffing for a seasonal peak at largest production facility in Canada, where these roles are classified as permanent. But you can see in our normal pattern that in the March quarter.

Meredith Burns: Great. Okay, so I’m going to ask one or two more questions on the quarterly results, and then we’re going to shift to a couple other topics. But this one is on geographic growth in Vista. I get the economy isn’t what we thought it would be, though I have been hearing Europe is worse than the U.S. And here, your European business continues to look great, while the predominantly U.S. focused Vista continues to lag, especially in gross profit. More context on any call out drivers on what’s good in Europe or bad in the U.S. would be helpful.

Robert Keane: Sure. Good question. I start out by saying our upload and print businesses, call four plus years ago, we really pushed to more autonomy and more decentralization. The entire teams in both of those businesses are just doing a great job. They’re firing on all cylinders and we’re just really proud of what they’re doing and having a positive impact. We do believe this market overall has room for consolidation and that we can leave that. And I think competitive market like the uploaded print market in Europe, the fact they’re doing well demonstrates that belief. Now at Vista, we are actually seeing higher constant currency growth outside of U.S. compared to what we are doing in the U.S. That’s true in Canada, it’s true in Europe, and it’s true in Australia.

Now consumer revenue €“ up year-over-year, down slightly overall, but there are a few markets where it grew stronger outside of the U.S. I think the main issues that we really have to understand our customer sentiment, they do drop in some business oriented products, but again, that changes market by market. If I look at the ability to €“ that changes market to market, and again, I realize I’m in this comment, I’m mixing upload and print in Vista. But we’ve been able to map or get quite a bit of pricing changes in upload and print earlier. We will be lapping some of those and you may face some great moderating there. Sean, you may add a few more comments. I guess the last thing is, in the U.S. a supermarket is tough and competitive. As I mentioned, we didn’t chase revenues with advertising.

And in this quarter that has been a big impact, especially in the U.S. Do you have any other thoughts on the difference between Europe and

Sean Quinn: Yes, I think you covered most of it. We’ve seen €“ I think the as you indicated, a lot of the sort of differential growth in our upload and print businesses versus, let’s say, Vista in North America is not necessarily market specific. There’s other dynamics at play there, including the speed at which they’ve been able to operate, crack into new product categories, acquire new customers especially over the last two years, take share. And so there’s market specific but also kind of business specific factors there. I think just in Vista, our absolute growth in revenue was basically this roughly the same between Europe and North America in Q2, just to kind of give you a sense of that weight. And I think €“ there’s all sorts of dynamics here.

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