Groupon (GRPN) Q3 Loss Narrower Than Expected, Revenues Down
Groupon GRPN reported a non-GAAP loss of 12 cents per share in third-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of 16 cents. The company reported a non-GAAP loss of 68 cents per share in the year-ago quarter.
Revenues of $126.5 million beat the Zacks Consensus Estimate by 0.39%. The figure declined 12.4% on a year-over-year basis (down 13.8%, excluding the foreign exchange effect).
Region-wise, North America revenues of $94.9 million beat the consensus mark by 0.45% but slumped 12% year over year. International revenues of $31.5 million missed the consensus mark by 7.51% and fell 13.6% year over year (down 19.3%, excluding the foreign exchange effect).
Groupon, Inc. Price, Consensus and EPS Surprise
Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote
Quarterly Details
Local revenues of $115.5 million beat the Zacks Consensus Estimate by 2.74% but declined 9.8% year over year (down 11.1% excluding the foreign exchange effect). North America Local revenues declined 9.5%, while International Local revenues fell 10.6% year over year.
Consolidated Travel revenues of $4.16 million missed the consensus mark by 31.22% and decreased 30.9% year over year. North America Travel revenues fell 36.6% year over year. International Travel revenues declined 19% in the reported quarter.
On a consolidated basis, Goods revenues of $6.86 million missed the consensus mark by 14.74% and declined 34.3% year over year. North America Goods revenues declined 36.4%, while International Goods revenues fell 36.6%, excluding the foreign exchange effect, on a year-over-year basis.
Customer Metrics
At the end of the third quarter, Groupon had approximately 17 million active customers compared with 20.2 million at the end of the prior-year quarter. The metric beat the Zacks Consensus Estimate by 1.86%.
At the end of the third quarter, the company had approximately 10.4 million active customers based in North America, beating the consensus mark by 6.7%, and 6.6 million active international customers, missing the consensus mark by 4.9%.
Operating Details
In the third quarter, gross profit came in at $110.7 million, down 12% year over year.
Selling, general and administrative expenses fell 32.9% year over year to $80 million in the reported quarter. Marketing expenses declined 23.7% to $28.9 million.
The company reported a GAAP operating loss of $464,000 compared with a loss of $36.3 million in the year-ago quarter.
Balance Sheet & Cash Flow
Groupon exited the quarter with cash and cash equivalents of $86.1 million, down from $118.1 million as of Jun 30, 2023.
In the third quarter, the company generated $13.85 million in operating cash outflow against the operating cash outflow of $42.3 million generated in the prior quarter.
Groupon reported a free cash outflow of $17.97 million against $44.6 million of free cash flow reported in the previous quarter.
Guidance
For fourth-quarter 2023, the company expects revenues in the band of $127.5-$137.5 million, indicating a 14-7% year-over-year decline. The Zacks Consensus Estimate for revenues is pegged at $144.94 million.
Adjusted EBITDA is expected to be between $18 million and $25 million.
Groupon expects a positive free cash flow for the fourth quarter.
Zacks Rank & Other Stocks to Consider
Groupon currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the retail-wholesale sector are American Eagle Outfitters AEO, Best Buy BBY and Amazon AMZN. While American Eagle Outfitters currently sports a Zacks Rank #1 (Strong Buy), Best Buy and Amazon carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters shares have gained 31.9% year to date. It has a long-term earnings growth rate of 15.76%.
Best Buy shares have lost 21.6% on a year-to-date basis. The company has a long-term earnings growth rate of 6.14%.
Amazon shares have rallied 67.4% on a year-to-date basis. AMZN has a long-term earnings growth rate of 28.5%.
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