Zulily sinks after retailer announces chief financial officer departure, misses 4Q forecasts

MarketsAssociated Press

Shares of Zulily plunged in premarket trading Thursday after the online retailer surprised Wall Street with quarterly earnings that fell short of expectations and announced the abrupt departure of a top executive.

The Seattle-based company said Wednesday that Marc Stolzman will no longer serve as chief financial officer as of Friday. Accounting vice president Tad K. Larsen will take over financial management duties until the company names a new CFO.

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Zulily runs a website that offers deals on children's apparel and other products for moms. The company launched its namesake website in 2010 and then held an initial public offering of stock in November 2013.

The company reported on Wednesday fourth quarter earnings of $10.9 million and adjusted earnings of 11 cents per share.

That missed average analyst expectations by 3 cents per share, according to Zacks Investment Research.

Revenue of $391.3 million per share also fell short of forecasts.

Stifel analyst Scott W. Devitt said he was reducing his estimates for the company and dropping the price target on its stock to $25 from $27.

"We believe management understands and is actively initiating changes/alterations to the business model to drive the next leg of growth," the analyst wrote in a research note.

Investors sent the shares tumbling more than 25 percent, or $5.04, to $14.85 in premarket trading an hour before markets opened Thursday.

Zulily shares closed at $37.30 after their first day of trading in late 2013 and then topped $70 a few months later. But the stock sank 44 percent last year while the broader Standard & Poor's 500 index rose 11.4 percent.