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Groupon (GRPN) Posts Wider Loss in Q2, Revenues Down Y/Y

·4 min read

Groupon GRPN reported a second-quarter 2022 non-GAAP loss of 34 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 24 cents. The company had reported non-GAAP earnings of 33 cents per share in the year-ago quarter.

Revenues of $153.2 million missed the Zacks Consensus Estimate by 11.95%. The figure declined 42.4% on a year-over-year basis (down 41% excluding the foreign exchange effect).

Region-wise, North America revenues plunged 30% year over year to $112.1 million. International revenues fell 61% (down 56% excluding the foreign exchange effect) year over year to $41.1 million.

Quarterly Details

Service revenues were down 25.7% year over year to $153.2 million.

Local revenues of $133.6 million declined 26% year over year (down 24% excluding the foreign exchange effect). North America Local revenues decreased 27.4% while International Local revenues decreased 11.1% year over year.

Groupon, Inc. Price, Consensus and EPS Surprise

Groupon, Inc. Price, Consensus and EPS Surprise
Groupon, Inc. Price, Consensus and EPS Surprise

Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote

 

Consolidated Travel revenues decreased 30.2% year over year to $7.68 million. North America Travel revenues declined 45.3% year over year. International Travel revenues increased 5.5% in the reported quarter.

On a consolidated basis, Goods revenues declined 82.9% year over year to $11.95 million. North America Goods revenues declined 51.5% while International Goods revenues plunged 89.5%, excluding foreign exchange effect, on a year-over-year basis.

Customer Metrics

At the end of the second quarter, Groupon had approximately 21.1 million active customers compared with 22.2 million at the end of the previous quarter.

At the end of the second quarter, the company had approximately 13.1 million active customers based in North America and 8 million active international customers.

Operating Details

In the second quarter, gross profit came in at $134 million, down 30.9% year over year.

Selling, general and administrative expenses fell 10.2% year over year to $123.9 million in the reported quarter. Marketing expenses decreased 32.8% year over year to $29.4 million.

The company reported an operating loss of $66.5 million compared with a loss of $2 million in the year-ago quarter.

Balance Sheet & Cash Flow

Groupon exited the quarter ending Jun 30, 2022, with cash and cash equivalents of $315.6 million, down from $403 million as of Mar 31, 2022.

In the second quarter, the company used $30.2 million of operating cash flow compared with $78.1 million generated in the prior quarter.
 
Groupon reported a free cash outflow of $39.3 million compared to $91.1 million of free cash flow reported in the previous quarter.

Guidance

Groupon has withdrawn its previously issued full-year 2022 revenue and adjusted EBITDA guidance, given its turnaround strategy as well as uncertain macroeconomic environment.

For the full year of 2023, Groupon expects a free cash flow of $100 million and an adjusted EBITDA margin of 15-20%.

Zacks Rank & Stocks to Consider

Groupon currently has a Zacks Rank #3 (Hold).

Dollar General DG, Coupang CPNG and ACV Auctions ACVA are some better-ranked stocks that investors can consider in the broader Zacks Retail-Wholesale sector. All the three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General is set to announce second-quarter fiscal 2022 results on Aug 25. DG shares have been up 8.6% year to date.

Coupang is set to announce second-quarter 2022 results on Aug 10. CPNG shares have been down 35.5% year to date.

ACV Auctions is set to announce second-quarter 2022 results on Aug 10. ACVA shares have been down 62.2% year to date.


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