Here's Why You Should Avoid Investing in Cimpress Stock Now

Core Viewpoint - Cimpress plc (CMPR) has underperformed in operational performance, leading to investor disappointment due to rising costs, high debt levels, and foreign exchange challenges [1][2]. Group 1: Financial Performance - Cimpress's shares have declined by 41.3% over the past year, significantly worse than the industry average decline of 11.1% [2]. - The company's cost of revenues increased by 3.3% in fiscal 2024 and by 5.6% year-over-year in the second quarter of fiscal 2025, driven by rising costs for materials and shipping [4]. - General and administrative expenses rose by 16.7% year-over-year in the fiscal second quarter, primarily due to increased compensation costs [5]. Group 2: Cost Challenges - The company is facing persistent input cost inflation, which, if not controlled, could severely impact margins and profitability in future quarters [5]. - Rising costs for product substrates, production materials, freight, and energy are contributing to the overall increase in operating expenses [4]. Group 3: Debt and Forex Exposure - Cimpress's debt level stood at $1.6 billion at the end of the second quarter of fiscal 2025, raising concerns given its cash and cash equivalents of only$224.4 million [6]. - The company's international operations expose it to risks from adverse currency fluctuations, particularly with a strengthening U.S. dollar affecting pricing and profit margins outside the U.S. [7].