Groupon GRPN reported first-quarter 2020 non-GAAP loss of $1.63 per share, narrower than the Zacks Consensus Estimate of a loss of $2.01. Notably, the company reported a earnings of 58 cents reported in the prior-year quarter.
Revenues of $374.2 million lagged the Zacks Consensus Estimate by 0.9% and declined 35% on a year-over-year basis (down 35% excluding foreign exchange effect).
Region-wise, North America revenues decreased 34.2% from the year-ago quarter to $235.1 million. International revenues fell 37.2% (down 35.4% excluding foreign exchange effect) year over year to $139 million.
Service revenues were down 27.6% year over year to $207 million. Product revenues slumped 42.9% to $167.1 million.
Groupon, Inc. Revenue (Quarterly)
Groupon, Inc. revenue-quarterly | Groupon, Inc. Quote
Moreover, Local revenues of $191.3 million declined 24.1% from the year-ago quarter. North America Local revenues decreased 20.9% and International Local revenues fell 32%, excluding foreign exchange effect.
Further, Goods revenues tumbled 38.2% year over year to $195.9 million. North America Goods revenues plunged 45.5%. International Goods revenues declined 35.6%, excluding foreign exchange effect.
Travel revenues fell 64.4% year over year to $9.7 million. North America Travel revenues plunged 66%. International Travel revenues declined 61.2%, excluding foreign exchange effect.
In the first quarter, gross billings were $806.4 million, down 30.7%, excluding foreign exchange effect.
North America billings were $526.7 million, down 31.5% year over year. International billings were $279.7 million, down 29.3% excluding foreign exchange effect.
North America Local, Travel and Goods gross billings declined 21.8%, 63.4% and 42.5% on a year-over-year basis, respectively.
International Local, Travel and Goods gross billings declined 22.2%, 46.5% and 33.1% on a year-over-year basis, excluding foreign exchange effect, respectively.
Global units sold during the reported quarter declined 20% year over year to 29.8 million, primarily owing to the coronavirus crisis-induced negative impact on demand in the month of March, lower Goods sales, decrease in traffic and fewer customers. North America units were down 13% and 42% in Local and Goods, respectively. International units were down 13% in Local and 22% in Goods.
As of Mar 31, 2020, Groupon had approximately 16.5 million active customers internationally compared with 17.1 million at the end of the previous quarter.
Moreover, as of Mar 31, 2020, the company had approximately 25.3 million active customers based in North America compared with 26.5 million at the end of the prior quarter.
Gross profit in the first quarter came in at $201.2 million, down 34% (down 34%, excluding foreign exchange effect) year over year.
International gross profit decreased 39% year over year, excluding foreign exchange effect, to $57.5 million. Coronavirus crisis led negative impact on demand in the month of March, intense competition in Groupon’s Goods category, weak consumer sentiment in Europe, particularly the U.K., and a customer shift toward lower margin Local offerings negatively impacted profitability.
International Local, Goods and Travel gross profit decreased 35%, 47% and 66% on a year-over-year basis, excluding foreign exchange effect, respectively.
Moreover, North America’s gross profit fell 31% to $143.8 million, primarily owing to fewer customers and lower traffic. North America Local, Goods and Travel gross profit decreased 23%, 52% and 74% on a year-over-year basis, respectively.
Adjusted EBITDA loss came in at $22.5 million, compared with adjusted EBITDA of $47 million reported in the prior-year quarter.
Selling, general and administrative (SG&A) expenses decreased 1.6% year over year to $207.1 million in the reported quarter.
Marketing expenses declined 36% to $60.1 million, primarily owing to lower offline marketing investments and accelerated traffic declines.
The company reported operating loss came of $197.9 million, against operating income of $2.2 million in the prior-year quarter.
Groupon, Inc. Price, Consensus and EPS Surprise
Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote
Balance Sheet & Cash Flow
Groupon exited the quarter ending Mar 31, 2020, with cash and cash equivalents of $666.9 million, down from $750.9 million, as of Dec 31, 2019.
As of Mar 31, 2020, the company had $150 million of outstanding borrowings under $400 million revolving credit facility.
The company utilized $236.4 million of operating cash flow compared with $201.4 million generated in the prior quarter.
Free cash outflow came in at $247 million compared with $185.9 million of free cash flow reported in the previous quarter.
For second-quarter 2020, Groupon projects adjusted EBITDA loss between $(45) million and $(20) million.
Zacks Rank & Stocks to Consider
Groupon currently carries a Zacks Rank #4 (Sell).
eBay EBAY, Fiverr International FVRR and Wayfair W are some better-ranked stocks in the broader Retail-wholesale sector.
eBay currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for 2020 earnings has been revised upward by 11.7% in the past 30 days to $3.45 per share. You can see the complete list of today’s Zacks #1 Rank stocks here.
Wayfair currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2020 is pegged at a loss of $4.23 per share, having narrowed from a loss of $4.53 in the past 30 days.
Fiverr currently carries a Zacks Rank #2. The consensus mark for 2020 is pegged at a loss of 31 cents per share, having narrowed from a loss of 35 cents in the past 30 days.
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