CafePress stock sinks after weak outlook

NEW YORK (AP) -- Shares of CafePress Inc. sank Tuesday after the company reported weaker-than-expected second-quarter revenue and gave an outlook below Wall Street's expectations due to muted expectations surrounding the upcoming presidential elections, as well as the weak economy in Europe.

THE SPARK: The San Mateo, Calif.-based maker of personalized coffee mugs, T-shirts and other products posted a loss of $260,000, or 2 cents per share, in the April-June period. That compares with a loss of $129,000, or 1 cent per share, in the same period a year earlier.

Adjusted earnings were 10 cents per share in the latest quarter.

Revenue rose 26 percent to $47.1 million from $37.3 million.

Analysts, on average, were expecting earnings of 9 cents per share on revenue of $48.7 million, according to a poll by FactSet.

For the current quarter, CafePress is forecasting adjusted earnings of 5 cents to 7 cents per share on revenue of $42.5 million to $45 million. Analysts are expecting earnings of 10 per share on revenue of $49.9 million.

"Revenue from political gear and international channels was slightly weaker than expected during the period," said CEO Bob Marino in a statement.

THE ANALYSIS: Kevin Kopelman of Cowen and Co. noted that political merchandise is one of the site's largest categories. He downgraded the stock to "Neutral" from "Outperform," saying the slowdown in organic growth — or growth of businesses excluding recent acquisitions — was greater than expected.

WHY IT MATTERS: CafePress is among the many consumer-focused Internet businesses that went public in the past year or so, the biggest one being Facebook. But the companies are not doing as well as expected, so investors are latching on to any signs of trouble to drive down the stocks.

SHARE ACTION: Shares fell $5.76, or 42 percent, to $7.94 in afternoon trading. Earlier, the stock hit $7.76, its lowest level since going public in March at $19.