Counselor Top 40 distributor Cimpress (asi/162149) has had a less-than-encouraging start to its fiscal year.

The parent company of print and promo firms including VistaPrint, PrintBrothers and National Pen (asi/281040) fell a bit short of expectations in its Q1 2027, according to a recent earnings report. While the Dunkirk, Ireland-based company grew revenue by 8% overall, it missed expectations. Organic constant-currency growth was 2%, and adjusted EBITDA fell 9% to $89.8 million.

“Cimpress’ first quarter FY2027 financial results were below our expectations,” Cimpress Chairman Robert Keane wrote in a letter to investors. “We are not satisfied with the quarter and are accelerating our previously communicated cost reduction plans for which the impact will build in Q2 and grow significantly in the second half of the year.”

VistaPrint, specifically, faced several pressures this quarter and represented the largest gap versus company expectations.

Keane added that Cimpress is accelerating cost actions through “an insurance plan” for meeting financial objectives amid an ever-changing and uncertain operating environment.

Still, Keane said, Cimpress remains confident in its FY2027 guidance: revenue growth of at least 7%, organic constant-currency revenue growth of at least 3%, net income of at least $116 million and adjusted EBITDA of at least $520 million.

In an earnings call, Cimpress Chief Financial Officer Sean Quinn said VistaPrint’s declining performance can be attributed in part to weaker European demand for legacy products. Organic search and affiliate bookings were VistaPrint’s weakest channels, which makes sense considering customer discovery behavior is changing. The rise of AI search and AI Overviews in Google, and the growing relevance of large language models, has shifted how buyers find products, Quinn added.

However, AI has also proven helpful to Cimpress’ sales, the company said. AI-assisted organic discovery is Cimpress’ fastest-growing channel. The company is also seeing more customers upload designs using large language models, then bringing those designs to VistaPrint.

Cimpress’ Print & Upload business, however, did relatively well. PrintBrothers increased reported revenue by 28%, while The Print Group grew 13%.

Tariffs and higher manufacturing costs also contributed to overall expenses, Cimpress said. North American manufacturing start-up costs were $5.9 million higher than the same time last year, while tariffs on some goods sold into the U.S. added $4.2 million in costs. Net energy-related input costs were also $1.8 million higher than last year.

A $7.5 million in IEEPA tariff refunds partially offset some of these costs, and Quinn expects to be less impacted by tariffs and manufacturing costs in the second half of FY27.

Based on estimated 2025 North American promotional products revenue of $350.9 million, Cimpress ranks 10th on Counselor’s most recent list of largest distributors in the industry. As of Oct. 29, Cimpress (NASDAQ: CMPR) shares were trading at $66.25.