"We are not satisfied with this quarter" , acknowledges Robert Keane, CEO of Cimpress, in his October 28 letter to investors. The Irish group, which owns online printing retailers such as VistaPrint, Exaprint, Pixartprinting, and WIRmachenDruck, is struggling to translate its business growth into increased profitability.
In the first quarter of its 2027 fiscal year (ended September 30, 2026), its revenue increased by 8%, to $934 million, and by just 2% on a like-for-like and constant-currency basis, while its adjusted EBITDA fell by 9% to $89.8 million and its operating income plummeted by 47% to $26 million.
Acquisitions That Boost PrintBrothers' Sales
PrintBrothers, which includes WIRmachenDruck, druck.at, and Printdeal, among others, reported quarterly revenue of $235.9 million, up 28% year-over-year.
This growth is primarily driven by recent acquisitions, which account for 25 percentage points. Sales rose 5 percent, mainly due to an increase in order volume.
Profitability, on the other hand, is following the opposite trend. PrintBrothers? EBITDA fell by 6% to $24.3 million, compared with $25.7 million a year earlier. This decline is primarily due to an additional expense of $2 million related to a long-term incentive compensation program.
This was partially offset by the contribution from recently acquired companies, which generated an additional $2.7 million in EBITDA.
The Print Group Faces a Decline in Orders from Resellers
The situation is similar at The Print Group, which includes Exaprint, Pixartprinting, Easyflyer, Mixam, and Tradeprint. Its revenue rose 13% to $109.3 million, but its organic growth (at constant exchange rates) was limited to 2%.
This growth is primarily driven by an increase in printing work performed for other Cimpress companies. Sales to external customers remain relatively stable. In particular, the group has observed a decrease in the average order value for certain product categories, as well as a persistent decline in sales to resellers, which has been partially offset by sales to end customers.
The Print Group's EBITDA decreased by 3% to $18.1 million. According to Cimpress, increases in energy, raw material, and transportation costs had a negative impact of $500,000 on quarterly earnings. Currency effects also contributed to this decline.
In France, online printing platforms are gaining ground on retailers
During the earnings call on October 29, Robert Keane noted that France was Cimpress's third-largest market in terms of revenue, primarily due to the operations of VistaPrint and The Print Group.
According to him, the challenges faced in the French market stem in particular from changes in distribution channels. End customers are increasingly ordering their printed materials directly, bypassing local printers or graphic arts professionals who traditionally act as resellers. This trend benefits certain Cimpress companies but hurts The Print Group, which has historically been more dependent on these intermediaries.
The official also discussed the impact of the heat wave and the wildfires that occurred over the summer.
New cost-cutting measures to restore profitability
Faced with results that fell short of its forecasts, Cimpress has decided to accelerate its cost-cutting program. The measures implemented are expected to yield their first results in the second quarter of fiscal year 2027, with greater savings anticipated in the second half of the year. For example, Cimpress plans to further pool production resources and technology platforms across its various companies.
At the same time, the group is continuing its capital expenditures, particularly in new facilities in Mexico. These projects are temporarily increasing its expenses, but Cimpress expects a significant reduction in its production costs starting in fiscal year 2028, thanks to the ramp-up of the new sites and the elimination of certain redundant expenses.
These reorganizations are already taking a toll on Cimpress. In the first quarter, the group recorded nearly $4 million in restructuring charges, compared with $298,000 a year earlier.
Cimpress nevertheless maintains its targets for the full 2027 fiscal year, including revenue growth of at least 7% and adjusted EBITDA of at least $520 million.
