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CafePress Reports Q3 Sales Decline

CafePress reported this month that its third quarter 2017 net sales declined 22%, year-over-year, to about $15.3 million. The provider of customizable and personalized products like clothing, bags and drinkware said that revenue for the first nine months of the year also dropped, falling 12% to $51.49 million.

In Q3, total revenue plummeted due to weakened sales on CafePress.com – the platform that accounted for 71% of the company’s total quarterly sales. “The decline was attributable to a reduction in traffic and conversion rate on the website,” CafePress said in an earnings release. “We believe the reduction in traffic was driven by changes in search engine algorithms.”

In what was a bright spot, revenue from CafePress’s retail partner channel increased 26% year-over-year to $4.4 million. “We benefited from more robust product catalogs among our established partners compared to the prior year, which were in the build out process during the third quarter of 2016,” CafePress said.

Nonetheless, third quarter gross profit and gross margin both declined for CafePress. Gross profit tallied $6.1 million, a plunge of $2.4 million from the prior year, while gross margin registered 39.6% versus 42.9%. “The decline was attributable to higher cost of revenue,” said CafePress, noting that Q3’s net loss was $3.6 million, or $0.22 per diluted share.

Despite the tough times, CafePress is focused on engineering a return to better days. “We continue to make progress on our multi-year turnaround strategy, specifically focusing on completing the modernization of the CafePress.com website…as we prepare to demolish the old site,” says CEO Fred Durham. “These efforts are critical as we continue to optimize the business and enhance our technology to re-energize our customer experience and ultimately return to profitable growth.”