Groupon Q4 Earnings Miss Estimates, Revenues Decrease Y/Y

Groupon GRPN reported a loss of $1.20 per share in the fourth quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 6 cents. The company reported earnings of 76 cents per share in the year-ago quarter.The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering a negative average surprise of 408.67%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Revenues of $130.4 million beat the consensus estimate by 1.13%. The figure also decreased 5.3% on a year-over-year basis.Region-wise, North America’s revenues of $96.7 million beat the consensus mark by 0.89% and declined 3.2% year over year. International revenues of $33.7 million beat the consensus mark by 7.16% and decreased 10.9% year over year (10.7% excluding the foreign exchange effect).Groupon, Inc. Price, Consensus and EPS Surprise Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. QuoteGRPN’s Quarterly DetailsLocal revenues of $120 million beat the Zacks Consensus Estimate by 2.87% and declined 2.9% year over year. North America Local revenues decreased 0.4%, while International Local revenues declined 10.3% year over year.Consolidated Travel revenues of $4.3 million missed the consensus mark by 20.7% and decreased 20.4% year over year. North America Travel revenues decreased 20.9% year over year. International Travel revenues declined 19.4% in the reported quarter (18.3% excluding the foreign exchange effect).On a consolidated basis, Goods revenues of $6 million missed the consensus mark by 4.38% and declined 29.9% year over year. North America Goods revenues declined 45.1% and International Goods revenues decreased 10.6%, excluding the foreign exchange effect, on a year-over-year basis.GRPN’s Customer MetricsAt the end of the fourth quarter, Groupon had approximately 15.4 million active customers compared with 16.5 million at the end of the year-ago quarter. However, the metric beat the Zacks Consensus Estimate by 4.12%.The company had approximately 10.3 million active customers based in North America, beating the consensus mark by 5.86% and 5.1 million active international customers, beating the consensus mark by 0.99%.Operating Details of GRPNIn the fourth quarter, Groupon’s consolidated gross profit fell 3.4% from the year-ago period’s levels to $118.2 million. North America gross profit fell 0.1% and International gross profit declined 11.5%, excluding the foreign exchange effect, on a year-over-year basis.Gross margin expanded 180 basis points to 90.6%.Selling, general and administrative expenses remained flat compared with the prior year period at $72.5 million.The company reported a GAAP operating profit of $2.7 million compared with a profit of $17.7 million in the year-ago quarter. Also, adjusted EBITDA declined 30.5% to $18.7 million as the company increased its marketing spend in the fourth quarter, which was not as efficient as expected due to tech migration issues.GRPN’s Balance Sheet & Cash FlowGroupon exited the quarter with cash and cash equivalents of $228.8 million, up from $159.7 million as of Sept. 30, 2024.In the fourth quarter, the operating cash inflow was $67 million against the operating cash outflow of $16.3 million in the prior quarter.Groupon reported a free cash inflow of $63.2 million against $19.7 million of free cash outflow reported in the previous quarter.GRPN’s GuidanceFor the first quarter of 2025, the company expects revenues in the band of $114-$117 million, indicating a 7.5-5% year-over-year decline. The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $115.4 million, indicating a 6.24% year-over-year decline.Adjusted EBITDA is expected to be between $7 million and $10 million.Groupon expects a negative free cash flow for the first quarter.Compared with the reported quarter, the first quarter is assumed to perform better in the Local segment with increased headwinds in Travel and Goods.For 2025, the company expects revenues between $493 million and $500 million, indicating a year-over-year change in the band of 0-2%.Adjusted EBITDA is expected to be between $70 million and $75 million.Groupon expects a positive free cash flow of at least $41 million for 2025.GRPN's Zacks Rank and Stocks to ConsiderCurrently, GRPN carries a Zacks Rank #3 (Hold).Alibaba BABA, BJ’s Restaurants BJRI and Boot Barn BOOT are some better-ranked stocks that investors can consider in the broader Zacks Retail-Wholesale sector. BABA, BJRI and BOOT presently sports a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus mark for BABA’s 2025 earnings has been revised eight cents upward to $8.80 per share over the past 30 days, indicating a 2.09% year-over-year increase. BABA’s shares have risen 82.6% in the past year.The consensus mark for BJRI’s 2025 earnings has been revised upward by two cents to $1.73 per share over the past seven days, indicating a 17.69% year-over-year increase. BJRI’s shares have lost 7.2% in the past year.The consensus mark for BOOT’s 2025 earnings has remained unchanged over the past 30 days at $5.89 per share, indicating a 21.44% year-over-year growth. BOOT’s shares have gained 17.1% in the past year.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. 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