That’s despite Groupon’s ongoing efforts to reduce what it calls “empty calories,” the low- to negative-margin products that drive short-term increases in revenue but do little to generate long-term profits.

Since Rich Williams took the helm as CEO of Groupon Inc. in November 2015, he’s been stressing the need for the company to reduce what it calls “empty calories,” the low- to negative-margin products that drive short-term increases in revenue but do little to generate long-term profits.

Rich Williams, CEO, Groupon

Rich Williams, CEO, Groupon

But despite those efforts Groupon’s gross profit fell 3.3% to $309.5 million during the first quarter ended March 31 from $320.1 million during the same period a year earlier. However, that decline was largely due to its international markets. In North America, profit rose 2.3% to $220.9 million from $215.9 million.

It was a similar story within its Goods business, which is the division of Groupon that sells physical goods. Overall its Goods profit fell 14.2% during the first quarter, but in North America, Goods profit rose slightly year over year.

Cost-cutting contributed to the profit improvement: Groupon’s head count fell by 2.0% during the quarter to 7,120 from 7, 267 in the fourth quarter.

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Williams’ other main initiative has been pulling Groupon out of unprofitable markets. Groupon exited 11 markets during the quarter; it now operates in 15 countries.

For the quarter ended March 31, Groupon, No. 26 in the newly released Internet Retailer 2017 Top 500, reported:

  • Total revenue of $673.6 million, down 3.6% from $698.4 million a year earlier.
  • North American revenue of $473.4 million down 5.5% from $500.8 million.
  • International sales of $200.3 million, up 1.4% from $197.6 million.
  • Groupon Goods revenue of $378.0 million, down 6.4% from $404.0 million.
  • Groupon Goods profit of $55.7 million, down 14.2% from $64.9 million.
  • North American revenue for Groupon Goods of $252.4 million, down 9.4% from $278.7 million.
  • North American profit from Groupon Goods of $36.4 million, a slight increase from $36.2 million.
  • International revenue for Groupon Goods of $152.7 million, a 31.3% increase from $116.3 million.
  • International profit from Groupon Goods of $19.3 million, down 32.8% from $28.7 million.
  • A loss from continuing operations of $20.9 million compared to a $43.5 million loss.
  • A net loss of $20.4 million compared with a year-ago loss of $45.6 million.
  • Gross billings, which reflect the total amount consumers paid for Groupon vouchers, excluding applicable taxes and refunds, stood at $1.358 billion, a 0.9% decrease from $1.370 billion.
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