- Overall Groupon made a net loss of $51.7m, $0.01 per share
- Shares spike in immediate aftermath of earnings release, as loss is less than expected
- In North America, gross profit grows 10% year-on-year to $217m
Despite attracting nearly 1.1 million new customers, Groupon still made a net loss of $51.7m in Q2 2016.
The loss was less than anticipated – $0.01 per share, rather than $0.02 – which caused a sudden surge in share prices, up around 25% in the immediate hours after the earnings were released on 27 July.
The company generated gross profit of $333.6m, down from $337m in the same period in 2015, however, overall it made a net loss that was substantially greater than in Q2 of last year, when it stood at $15.3m.
Groupon’s CEO Rich Williams focused on the positives, however, and said: “We continued to see strong traction in customer acquisition as we added more than 1 million new customers -- the most in more than two years.
“We’re excited with the progress of our marketing programs to date and their effectiveness in introducing millions more people to our marketplace.”
Groupon, which sells cut-price deals across categories including beauty and spa treatments, hotel bookings, fashion, food and lifestyle, has been undergoing restructuring in a bid to strengthen its business.
The company has exited certain countries, which caused its global units – vouchers and products sold before cancellations and refunds – to drop 4% year-on-year to 51 million.
Of its remaining regions, units in North America grew 6%, but that is where the good news stopped, as EMEA units fell 8% and Rest of World units dropped 30%.
There were some other highlights to note, however. In North America, gross profit grew 10% year-on-year to $217m. This represented a third consecutive quarter of double-digit year-on-year growth.
Cost-saving efforts also started paying off with SG&A declining $11.6m on “solid execution of operational streamlining initiatives”, the company noted.
Groupon raised its revenue guidance for the full year to between $3bn and $3.10bn.
