Shares of daily deals site, Groupon Inc. (NASDAQ: GRPN) slumped over 17 percent in premarket trading on Friday after it announced slower growth rate in the fiscal-third quarter mainly due to lackluster performance in the European market.
Ever since the Company made its IPO last year amid all the hype as fast growing Web Company, going has been very bumpy as its accounting methods were questioned by regulators even as investors doubt that its concept (daily discount offers from merchants) is getting mundane for consumers. Groupon Stock has now plummeted more than 80 percent since it made debut in public markets on November 20.
Although sales in North American region improved during the quarter, the growth in the international markets, which accounts for more than half of Groupon’s revenue remains a matter of concern. In Europe, the company is facing some management issues and substandard technical resources. Besides, a very frugal consumer spending in the backdrop of stagnating euro zone economy is stalling its growth in the region.
“We have a lot of work to do,” said Jason Child, Company’s Chief Financial Officer. Child will be accompanied by Company’s Chief Executive, Andrew Mason for the next week trip to Europe. He said that the company was hopeful sales will rebound in Europe during the fourth quarter.
For the fiscal third quarter, Groupon reported net loss of $ 2.98 million, or breakeven on per share basis compare to a net loss of $54.2 million or 18 cents a share, in the year earlier quarter.
Revenue climbed 32 % to $568.6 million from $430.2 million, in the year earlier period but falling short of its own revenue guidance of $ 580 million to $620 million, issued in the fiscal second quarter. Analysts polled by Thomson Reuters had most recently forecasted revenue of $590 million.
Now in order to enhance the shareholder value the Company is expanding in some other businesses. Just last month, it launched Breadcrumb, a point-of-sale iPad application beneficial for hospitality businesses such as restaurants and bars since it allows handling transactions. Groupon also introduced Groupon Goods, a service which allow users to sell discounted items such as furniture, television, etc, and Groupon Payments, which is a payment service for local merchants.
Looking ahead at fiscal fourth quarter, Groupon expects revenue to fall within the range of $625 million to $675 million while operating income is expected in the range of $0 to $20 million.
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