Groupon loses 25% in the stock market following broadly downbeat Q4 results

Groupon loses 25% in the stock market following broadly downbeat Q4 results

  • Groupon loses 25% in the stock market following broadly downbeat Q4 results.
  • Groupon posts $612 million in revenue in the fourth quarter versus $709 million expected.
  • Groupon makes 7 cents of earnings per share in the fourth quarter versus 15 cents expected.

Groupon released its fourth-quarter earnings report on Tuesday that saw a massive 25% decline in its stock in after-hours trading as the company announced to have missed the earnings and revenue forecast in the recent quarter.

According to Refinitiv, analysts were expecting the American global e-commerce marketplace to print $709 million in revenue in the fourth quarter. In terms of earnings, they had anticipated Groupon to make 15 cents per share in the recent quarter. The quarterly performance results announced on Tuesday, however, showed the company to have generated significantly lower $612 million in revenue in Q4 while its EPS (earnings per share) remained capped at a much lower 7 cents per share excluding items.

CEO Rich Williams Says Groupon Will Focus More On Experiences Rather Than Goods

CEO Rich Williams commented on Tuesday’s report and acknowledged the poor performance in the recent quarter. He also highlighted that committed efforts are now required to bring Groupon back into the growth territory. According to the CEO, Groupon is expected to adopt a new strategy that focuses more on experiences rather than goods. Such a plan, he added, is likely to fuel solid performance for Groupon in fiscal 2020.

Groupon also publicized a leadership decision on Tuesday. Melissa Thomas has been serving as the interim Chief Financial Officer for the e-commerce marketplace in the previous months. In light of her performance and dedication towards pulling Groupon out of the ditch of poor financial performance, however, the company has not decided to offer her the permanent position of the CFO. Groupon also announced that two new members, Helen Vaid and Valerie Mosley will be joining the company as members of the Board of Directors.

Groupon’s Performance In The Stock Market In The Past 14 Months

At the time of writing, Groupon is exchanging hands at $1.70 per share in the stock market that translates to a just over 25% decline in 2020 so far. The stock opened at $2.37 in January 2020 but settled around $1.70 after a 25% decline in extended-hours trading on Tuesday following the release of the earnings report.

Groupon’s performance in the stock market in 2019 remained under pressure as well. The stock opened at around $3.2 per share in January 2019 and was reported trading around $2.3 at the end of the year. The $1.7 billion company reported an annual loss of just over 25% last year.

By Michael Harris
I began trading in my early 20's at a local company and since then have combined my knowledge and love of content to become a news writer. I am passionate about bringing insightful articles to readers and hope to add some value to your portfolios!

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