Shares of Cimpress NV (CMPR) plunged 5.34% on Friday, January 31, 2025, during the intraday trading session. The drop came after the company reported disappointing fiscal second-quarter results, citing weakness in its US operations and increased costs as the primary factors weighing on performance.

In its Q2 earnings call, Cimpress management highlighted several key reasons behind the lackluster results:

• Lower revenue growth in the US market, particularly in business cards and consumer holiday products like cards and home decor.
• Increased advertising costs, nearly 50% higher year-over-year during peak holiday weeks, along with intensified competition and discounting from rivals.
• Changes to Google's core algorithm and search engine results pages, negatively impacting organic search performance and new customer acquisition.
• Ongoing headwinds from the slowdown in mature product categories like business cards, as the company shifts focus towards higher-growth areas.

To address these challenges, Cimpress outlined a series of actions it is taking, including:

• Cost controls and efficiency gains across various areas of the business.
• Prioritizing its product roadmap to focus on high-impact areas and respond to market dynamics.
• Reallocating advertising spend across channels based on performance and potential impact.
• Optimizing pricing strategies to mitigate cost pressures and maintain profitability.

While acknowledging the disappointing Q2 results, Cimpress management expressed confidence in its long-term strategic plans and ability to navigate the current challenges. The company remains focused on executing its stated objectives, including driving growth in higher-value product categories, expanding its Upload & Print business in the US, and leveraging its scale-based competitive advantages.