2023-03-16 17:06:32 ET
Groupon stock fell sharply after posting lighter than expected Q4 sales and withdrawing guidance for the year ahead.
For the fourth quarter, a GAAP EPS loss of $0.38 was $0.27 better than expected. However, a 33.6% drop in revenue to $148M was $12.1M weaker than anticipated by analysts. The company posted an adjusted EBITDA loss of $5.3M in the fourth quarter 2022, compared with positive $37.3M in the fourth quarter 2021.
“We are in the midst of executing a transformation strategy that we believe will allow Groupon to unlock its full potential,” CEO Kedar Deshpande said. "While we faced some macroeconomic headwinds in 2022, we also believe that we did not move quickly enough to adapt our business model to meet the new and emerging needs of our Local merchants and customers. Looking ahead to 2023, we are focusing the entire organization on three areas: improving the supply side of our marketplace to drive customer demand, leveraging an improved inventory base to make our marketing and promotional spend more efficient, and doing both of these against a backdrop of a meaningfully streamlined cost structure and much better operational rigor.”
He added that the company expects “significant cash outflows in the first quarter” of 2023 and adjusted EBITDA losses between $10M and $5M. Consolidated local billings are expected to decline 7% year over year and trend toward less than half 2019 levels.
“Given we are in the midst of executing our turnaround strategy, combined with an uncertain macroeconomic environment, we are withdrawing our previously issued full year 2023 free cash flow and adjusted EBITDA margin guidance,” the company stated.
Shares of Groupon ( NASDAQ: GRPN ) fell 7.14% shortly after the earnings announcement .
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Groupon stock slides on soft sales, pulled guidance