The whipping post

Groupon Q3 Earnings Beat Estimates, Revenues Decrease Y/Y

Groupon GRPN reported adjusted earnings of 33 cents per share in the third quarter of 2024, beating the Zacks Consensus Estimate of a loss of 25 cents by 232%. The company reported a loss of $1.31 per share in the year-ago quarter.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, delivering an average surprise of 107.77%.

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Revenues of $114.5 million missed the consensus estimate by 3.8%. The figure also decreased 9% on a year-over-year basis (down 10%, excluding the foreign exchange effect).

Region-wise, North America revenues of $86.9 million lagged the consensus mark by 3.68% and declined 9% year over year due to an increase in Local voucher redemption rates in the reported period. International revenues of $27.6 million missed the consensus mark by 4.85% and decreased 13% year over year (down 14%, excluding the foreign exchange effect) due to the exit of Local business in Italy.

Groupon, Inc. Price, Consensus and EPS Surprise

Groupon, Inc. Price, Consensus and EPS Surprise

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

GRPN has lost 19.4% against the Zacks Retail-Wholesale sector’s growth of 25.4% in the year-to-date period.

GRPN’s Quarterly Details

Local revenues of $105 million missed the Zacks Consensus Estimate by 5.81% and declined 9% year over year (10% excluding the foreign exchange effect). North America Local revenues decreased 8%, while International Local revenues declined 2% year over year.

Consolidated Travel revenues of $4.3 million beat the consensus mark by 7.28% and increased 3.4% year over year. North America Travel revenues increased 13.3% year over year. International Travel revenues declined 12.7% in the reported quarter.

On a consolidated basis, Goods revenues of $5.2 million beat the consensus mark by 14.58% and declined 23.8% year over year. North America Goods revenues declined 34.5%, while International Goods revenues decreased 11.7%, excluding the foreign exchange effect, on a year-over-year basis.

GRPN’s Customer Metrics

At the end of the third quarter, Groupon had approximately 15.5 million active customers compared with 17 million at the end of the year-ago quarter. However, the metric beat the Zacks Consensus Estimate by 3.68%.

At the end of the third quarter, the company had approximately 10.2 million active customers based in North America, beating the consensus mark by 6.58% and 5.3 million active international customers, missing the consensus mark by 1.49%.

Operating Details of GRPN

In the third quarter, gross profit was $102.9 million, down 7% year over year.

Selling, general and administrative expenses fell 10.8% year over year to $71.3 million in the reported quarter. This can be attributed to a decrease in cloud costs. Marketing expenses rose 25.4% to $36.3 million.

The company reported a GAAP operating loss of $5.6 million compared with a loss of $464K in the year-ago quarter.

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GRPN’s Balance Sheet & Cash Flow

Groupon exited the quarter with cash and cash equivalents of $159.7 million, up from $178.1 million as of June 30, 2024.

In the third quarter, the operating cash outflow was $16.3 million against the operating cash inflow of $15.3 million in the prior quarter.

Groupon reported a free cash outflow of $19.7 million against $10.8 million of free cash inflow reported in the previous quarter.

GRPN has penned an agreement to raise $197 million in new secured convertible debt, maturing in 2027 with a 6.25% coupon and a $30 strike price.

GRPN’s Guidance

For the fourth quarter of 2024, the company expects revenues in the band of $124-$131 million, indicating a 10-5% year-over-year decline. The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $144.38 million, indicating 4.83% year-over-year growth.

Adjusted EBITDA is expected to be between $14 million and $19 million.

Groupon expects a positive free cash flow for the fourth quarter.

For 2024, the company expects revenues between $486 million and $493 million, indicating a year-over-year change in the band of (6)-(4%).

Adjusted EBITDA is expected to be between $65 million and $70 million.

Groupon expects a positive free cash flow for 2024.

GRPN’s Zacks Rank & Stocks to Consider

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

Investors interested in the broader retail-wholesale sector can consider some better-ranked stocks like Booking Holdings BKNG, Amazon AMZN and Travelzoo TZOO, each of which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BKNG has gained 41.6% in the year-to-date period. The long-term earnings growth rate for BKNG is currently estimated at 15.68%.

Shares of Amazon have gained 38.1% in the year-to-date period. The long-term earnings growth rate for AMZN is currently expected at 20%.

Travelzoo has gained 100.7% in the year-to-date period. The long-term earnings growth rate for TZOO is currently anticipated at 8.72%.

 

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