Groupon loses $14M, ditches merchandise discounts
Groupon looks to make a big purchase
Fox Business Briefs: The daily-deals company is reportedly looking to acquisitions as shareholders show more concerns over its finances and stock price.
Groupon Inc. cratered after reporting a loss for 2019 and announcing plans to drop promotions for merchandise from toys to clothes while focusing on experiences such as travel and entertainment.
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The Chicago-based digital deals platform lost $22.4 million, or 4 cents a share, for the year as revenue fell 6.6 percent to $1.13 billion.
For the fourth quarter, Groupon earned a profit of $77 million. Adjusted earnings were 7 cents a share, trailing the 15-cent average estimate from analysts surveyed by Refinitiv. Revenue fell 23% to $612.3 million, trailing projections of $709.4 million.
"We did not deliver the financial performance we expected during the fourth quarter, and we recognize we must move swiftly to put Groupon back on a growth trajectory," Groupon CEO Rich Williams said in a statement.
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Following a review of strategic alternatives, Groupon said it will exit the North American goods category by the end of the third quarter and globally by the end of the year and focus on a local experiences marketplace that it estimates to be worth “north of $1 trillion.”
For the remainder of the year, Groupon set an operational goal of launching a new mobile app and expanding its bookable offers while posting year-over-year North American unit growth in the second half.
The company expects to deliver annual revenue growth in the mid-single digits by 2022.
Its board of directors approved a reverse stock split at a ratio of between 1-for-10 and 1-for-12, which is subject to shareholder approval.
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Groupon shares rose 27.6 percent this year through Tuesday, outperforming the S&P 500’s 4.3 percent gain.
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