Groupon Goods’ growth slows in Q1
April 29, 2016 11:40 AM
Since Groupon Inc. first began selling physical goods in addition to vouchers, Groupon Goods has been a bright spot for the company, posting double-digit growth even as the retailer struggled to reinvent itself. But that growth slowed in the first quarter as part of a broader strategic push by Groupon CEO Rich Williams.
Groupon, No. 26 in the Internet Retailer 2016 Top 500 Guide, said Thursday that revenue from its sales of physical goods inched up just $3.2 million in the first quarter, or 0.8%, to $418.7 million from $415.5 million a year earlier. Despite the slowdown for Groupon Goods, the small gain was better than Groupon’s 2.5% overall revenue loss. International sales, which were down 14.5%, accounted for all of that revenue shortfall. North American revenue was up 4.4%.
"When I took the CEO post last November, I focused the business on a few key initiatives," Williams writes in a letter to shareholders. "I said that we would streamline how and where we do business, that we would dramatically increase our customer acquisition efforts and that we would move away from empty calories—those low-margin product categories that drive short-term revenue but fewer long-term benefits—particularly in our shopping business."
Since Williams became CEO he has driven Groupon to focus on selling physical goods that generate "healthy margins and bring customers back to the site again and again."
Also on Thursday, Groupon named Mike Randolfi as its chief financial officer, succeeding interim chief financial officer Brian Kayman. Randolfi had been chief financial officer at online travel company Orbitz Worldwide Inc. He has also held a number of senior finance roles at Delta Air Lines Inc., including senior vice president and controller.
"Mike's strong financial acumen, e-commerce background and experience as a public company CFO make him the right candidate to help us continue our strategic progress and better connect the millions of merchants and consumers in our local marketplace," Williams says.
For the first quarter ended March 31, Groupon reported:
- Revenue of $732.0 million, down 2.5% from $750.4 million a year earlier.
- North American revenue of $500.8 million up 4.4% from $479.9 million
- International sales of $231.2 million, a 14.5% decline from $270.5 million
- Revenue for Groupon Goods of $418.7 million, a slight increase from $415.5 million.
- Loss from continuing operations of $45.6 million compared to a $16.7 million loss.
- A net loss of $49.1 million compared with a year-ago loss of $14.3million
- Gross billings, which reflect the total amount consumers paid for Groupon vouchers, excluding applicable taxes and refunds, stood at $1.472 billion, a 5.2% decrease from $1.552 billion.