Groupon shares bomb as profits miss expectations

 
Emma Haslett
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'Beauty World Japan' Exhibition Held In Tokyo
Daily deals site Groupon offers vouchers for beauty treatments and experiences (Source: Getty)

Shares in voucher website Groupon plummeted more than 15 per cent in early trading in New York after it unveiled a first-quarter loss.

The site, best known for its tireless efforts to popularise fish pedicures, said revenues in the first quarter had fallen to $673.6m, well short of analyst expectations of $723m, and four per cent lower than the $698.4m it reported during the same period last year. That pushed shares down 15.4 per cent to $3.38.

Groupon said it had racked up an operating loss of $24,400 during the period, up from a $42,100 loss in the first quarter of last year - but down from the $12,000 profit it reported in the final quarter of 2016.

The company, which expanded rapidly in the first part of this decade and said it had disposed of operations in 11 countries. Last year it received a $250m investment from Atairos.

However, it said it had added 500,000 new customers in the core North American market in the first quarter of the year, pushing active users in the region up to 31.6m by the end of March. Globally active customers rose to 48.3m.

Despite the dip in profits, Groupon said it was maintaining its 2017 profit guidance of $1.3bn to $1.35bn.

"In the first quarter, we continued to make solid progress in our mission to be the daily habit in local commerce," said chief executive Rich Williams.

"Our focus on growing customers in our marketplace, significantly improving the customer experience and continuing to streamline and simplify our business helped drive a 42 percent year-over-year increase in adjusted ebitda [earnings before interest, taxation, depreciation and amortisation] and gross profit of $309m for the quarter."

Read more: Groupon hikes 2016 revenue forecast

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