SHARES in SurfStitch (ASX:SRF) plunged as much as 43 per cent this morning, despite the online retailer delivering a solid earnings report for the December half-year.

Shares, which were issued at $1 in December 2014 and reached $2.09 in December last year, fell to a low of 99c this morning on the back of the group announcing its results for FY16.

Analysts say a lack of guidance for FY16 and a slowdown in the company's acquisition strategy could be behind today's share slump.

The former Billabong (ASX:BBG) subsidiary delivered a net profit of $5.7 million for the half-year ending December 31, which is up from a pro forma net profit of $300,000 a year earlier. 

The latest result was delivered on a 40 per cent surge in revenue to $144.9 million.

The Gold Coast-based e-commerce group, which has an online community of more than six million, also reported a 363 per cent lift in pro forma EBITDA (earnings before interest, tax, depreciation and amortisation) to $13.9 million.

The results were mainly driven by SurtStitch's bold acquisition strategy in the first-half of FY16, which included the purchase of online surf shop Surf Hardware International (SHI) for $23.7 million.

SHI came on the back of the acquisition of Garage Entertainment and its associated company TMG, which SurfStitch acquired for $15 million.

The group's rapidly growing network also includes surf content network Magicseaweed and online publisher Stab magazine, which it purchased for close to $14 million and 4.8 million shares earlier in 2015. 

CEO Justin Cameron says the group aims to bring all platforms together to achieve the full benefits of strategic acquisitions and its branding strategy. 

"We've made meaningful investments that are enabling us to create a unique ecosystem that engages with our core community at every stage of their action sports lifestyle," he says.

SurfStitch, which has operations in the US, Japan, Europe and Australia, saw growth accelerate in the first-half of FY16 in all regions, particularly North America which saw sales grow by 63 per cent to $24.1 million. Europe and Asia Pacific saw double-digit growth, growing 39 per cent and 32 per cent respectively.

SurfStitch predicts strong double-digit revenue growth to continue, however the company did not reaffirm its full-year EBITDA guidance which previously was expected to land between $15 million and 18 million.

"Given the pace of change and long-term opportunities presented to the business, management and the board believe it is no longer prudent to focus on a defined EBITDA range," say Cameron.

"Instead, EBITDA growth will be flexed based on investment around the global content strategy."

Cameron did, however, reaffirm the group's dedication to delivering upon its content strategy in the second-half of the financial year, in order to achieve long-term sustainable and profitable growth.

"Pressures in e-commerce and proliferation of online shopping are forcing retailers to compete on price if they have no other differentiating factor to capture an audience," says Cameron.

He says at the same time media companies have been looking for new ways to monetise their already captive audience in the face of decreasing marketing spend on traditional forms of advertising.

"Companies like Netflix and Amazon have found success in monetising their audience by offering exclusive products and offerings to participating members," says Cameron.

"Both companies have invested very heavily in content in order to capture this audience and have effectively created a virtuous cycle: invest in exclusive content, charge customers to gain access to that content, and once again engaged give them additional benefits that secure their loyalty."

SurfStitch is home to more than 50,000 styles from more than 600 different action sports and street fashion brands, including SurfStitch's vertical line of hard goods under the brands FCS, Gorilla, Hydro and Softech.

No dividends are currently planned for the group.

Picture: founders Justin Cameron (right) and Lex Pedersen.

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