Groupon Goods’ revenue grows 7.6% in Q2
July 27, 2016 04:30 PM
After a sluggish first quarter, Groupon Inc.’s sales of physical goods via its Goods division are growing once again. Even so, the company’s losses from continuing operations—which don’t include the various markets it has left and the restaurant management platform Breadcrumb, which it sold in May—continued to rise.
Groupon, No. 26 in the Internet Retailer 2016 Top 500 Guide, reported today that revenue for its Goods division rose 7.6% during the second quarter. Moreover, those sales are producing more profit for the company than its physical goods sales in the past, the retailer says. That’s part of Groupon CEO Rich Williams’s strategic push to “move away from empty calories” toward sales with a larger margin. In North America, for instance, the company’s gross profit from Goods rose 37.4% to $42.0 million from $30.6 million a year earlier.
“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,” said CEO Rich Williams. “We’re excited with the progress of our marketing programs to date and their effectiveness in introducing millions more people to our marketplace.”
Groupon still has work to do. Over the past year it has reduced its footprint; it currently operates in 27 countries, down from 47 a year ago. It plans to complete its evaluation as to whether it should leave more markets in the third quarter. The company also saw its overall gross margin fell to 22.3% in the second quarter, compared to 23.1% in the first quarter.
For the quarter ended June 30, Groupon reported:
- Total revenue of $756.0 million, up 2.4% from $738.4 million a year earlier.
- North American revenue of $516.9 million up 7.4% from $481.3 million
- International sales of $239.1 million, a 9.1% decline from $257.1 million
- Groupon Goods revenue of $452.4 million, up 7.6% from $420.5 million.
- North American revenue for Groupon Goods of $311.4 million, an 8.5% increase from $286.9 million.
- International revenue for Groupon Goods of $141.0 million, a 5.5% increase from $133.6 million.
- A loss from continuing operations of $51.7 million compared to a $15.3 million loss.
- A net loss of $54.9 million compared with a year-ago loss of $6.8 million
- Gross billings, which reflect the total amount consumers paid for Groupon vouchers, excluding applicable taxes and refunds, stood at $1.493 billion, a 2.4% decrease from $1.529 billion.
For the first half of the year, Groupon reported:
- Revenue increased to $1.488 billion, down slightly from $1.489 billion in the same period a year earlier.
- North American revenue of $1.018 billion, a 5.9% jump from $961.2 million.
- International sales of $470.0 million, a 11.0% decline from $527.8 million.
- Groupon Goods revenue of $871.1 million, up 4.2% from $836.0 million.
- Operating loss of $97.3 million compared to a $32.0 million loss a year ago.
- A net loss of $104.0 million compared with a year-ago gain of $94.8 million.
- Gross billings stood at $2.965 billion, down 3.8% from $3.081 billion.