Groupon GRPN reported non-GAAP earnings of 6 cents per share in the first quarter of 2024, beating the Zacks Consensus Estimate of a loss of 18 cents per share. The company reported a non-GAAP loss of 65 cents per share in the year-ago quarter.
Revenues of $123.1 million beat the consensus estimate by 4%. The figure increased 1% on a year-over-year basis (up 1%, excluding the foreign exchange effect).
Region-wise, North America revenues of $94.1 million beat the consensus mark by 10.7% and rose 5.5% year over year. International revenues of $28.95 million missed the consensus mark by 4.1% and fell 10.5% year over year (down 12.4%, excluding the foreign exchange effect).
Quarterly Details
Local revenues of $111.2 million beat the Zacks Consensus Estimate by 6.4% and rose 4.3% year over year (3.8% excluding the foreign exchange effect). North America Local revenues increased 6.2%, while International Local revenues fell 2% year over year.
Consolidated Travel revenues of $6.4 million beat the consensus mark by 32.6% and increased 12.3% year over year. North America Travel revenues rose 63.3% year over year. International Travel revenues declined 38.2% in the reported quarter.
On a consolidated basis, Goods revenues of $5.5 million missed the consensus mark by 7.5% and declined 40.7% year over year. North America Goods revenues declined 39.2%, while International Goods revenues fell 43.1%, excluding the foreign exchange effect, on a year-over-year basis.
Groupon, Inc. Price, Consensus and EPS Surprise
Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote
Customer Metrics
At the end of the first quarter, Groupon had approximately 16.1 million active customers compared with 18.2 million at the end of the year-ago quarter. The metric beat the Zacks Consensus Estimate by 4.6%.
At the end of the first quarter, the company had approximately 10.2 million active customers based in North America, beating the consensus mark by 11.4%, and 5.9 million active international customers, missing the consensus mark by 5.3%.
Operating Details
In the first quarter, gross profit was $110.6 million, up 6% year over year.
Selling, general and administrative expenses fell 26.9% year over year to $74.3 million in the reported quarter. Marketing expenses rose 15.9% to $28.8 million.
The company reported a GAAP operating income of $7.4 million against a loss of $30.6 million in the year-ago quarter.
Balance Sheet & Cash Flow
Groupon exited the quarter with cash and cash equivalents of $158.7 million, up from $141.6 million as of Dec 31, 2023.
In the first quarter, the operating cash outflow was $10.1 million against the operating cash flow of $54.5 million in the prior quarter.
Groupon reported a free cash outflow of $13.8 million against $51.1 million of free cash flow reported in the previous quarter.
Guidance
For second-quarter 2024, the company expects revenues in the band of $116-$122 million, indicating a 10-5% year-over-year decline. The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $125.14 million.
Adjusted EBITDA is expected to be between $12 million and $17 million.
Groupon expects a free cash outflow for the second quarter.
For 2024, the company expects revenues between $489 million and $515 million, indicating a year-over-year change in the band of (5%)-0%.
Adjusted EBITDA is expected to be between $80 million and $100 million.
Groupon expects a positive free cash flow for 2024.
Zacks Rank & Other Stocks to Consider
Groupon currently carries a Zacks Rank #1 (Strong Buy).
Investors interested in the broader retail-wholesale sector can consider some other top-ranked stocks like The Gap GPS, Amazon AMZN and Target TGT. While The Gap sports a Zacks Rank #1, Amazon and Target carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Gap has lost 3.9% in the year-to-date period. The long-term earnings growth rate for GPS is currently estimated at 12%.
Shares of Amazon have gained 50.7% in the year-to-date period. The long-term earnings growth rate for AMZN is currently projected at 29.60%.
Target has gained 11.5% in the year-to-date period. The long-term earnings growth rate for TGT is currently anticipated at 11.36%.
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