Groupon (Nasdaq: GRPN) said its adjusted earnings remained unchanged from last year in the first quarter even as revenues declined. However, the results topped the Street view, driving the company’s stock higher Tuesday evening.
Adjusted earnings remained unchanged at $0.03 per share but came in above the estimates. On an unadjusted basis, the company posted a net loss of $42.5 million or $0.07 per share, compared to a loss of $6.9 million or $0.01 per share in the first quarter of 2018.
Revenues dropped 8% annually to $578.4 million, hurt by lower customer traffic, but surpassed the market’s prediction. Service revenues dipped 5%, while product revenues fell 10%. Reflecting the lower traffic, amid muted demand, global units sold declined 12% to 37.2 million. In all the three business categories – Local, Travel and Goods – revenues and gross billing contracted year-over-year.
In all the three business categories – Local, Travel and Goods – revenues and gross billing declined year-over-year
During the quarter, overall gross profit slipped 6% to $306 million. Gross profit in North America decreased 4%, while international operations registered a 9% fall. The slump was due to multiple factors including lower email/SEO traffic and unfavorable pricing.
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“In the first quarter we made solid progress on our strategy and initiatives to improve the customer experience, expand our platform, grow our international business and continue our focus on operational rigor. The year is off to a stronger than expected financial start, which should allow us to accelerate our investments in a number of our initiatives as we move through the first half,” said CEO Rich Williams.
At the end of the quarter, the company had total active customers of 47.2 million, down 5% from last year. Meanwhile, the management reaffirmed its full-year 2019 guidance for adjusted EBITDA at $270 million.
After falling steadily over the recent months, Groupon shares pared some of their losses at the beginning of the year. The stock gained about 2% following the earnings report on Tuesday.