In North America, Groupon Goods's revenue fell nearly 29% in the second quarter.

Revenue from Groupon Inc.’s Goods business, the division of Groupon that sells physical goods, fell 18.9%  in the second quarter compared with the year-ago period. That comes on the heels of a 6.4% year-over-year decline in the first quarter.

That’s a marked shift as Goods had been one of Groupon’s stronger divisions. For instance, Goods’ revenue last year grew 2.9%, outpacing Groupon’s overall revenue, which rose 0.7%.

That shift reflects CEO Rich Williams‘s push to reduce what he calls “empty calories,” the low- to negative-margin products that drive short-term increases in revenue but do little to generate long-term profits. Groupon’s overall profit grew 4.1% in the second quarter.

Cost-cutting contributed to the profit improvement: Groupon’s head count fell by 8.5% during the quarter to 6,661 from 7, 276 a year earlier.

Groupon is also shifting its business toward what it calls voucherless promotions, which are offers that link to a consumer’s credit card and don’t require him to buy a voucher before he ventures into a store or restaurant. “Local commerce continues to be a vast opportunity, and we made great progress as a leader in the space with double-digit unit and gross profit growth in North America Local,” says CEO Rich Williams. “As we continue to build an amazing and voucherless customer experience and invest in our customers and merchants, we are excited about the growing strength of our local marketplace.”

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For the quarter ended June 30, Groupon, No. 26 in the Internet Retailer 2017 Top 500, reported:

  • Total revenue of $662.6 million, down 8.5% from $723.8 million a year earlier.
  • North American revenue of $451.9 million, down 12.6% from $516.9 million.
  • International sales of $210.7 million, up 1.9% from $206.8 million.
  • Groupon Goods revenue of $355.9 million, down 18.9% from $438.6 million.
  • Groupon Goods profit of $58.4 million, down 12.6% from $66.8 million.
  • North American revenue for Groupon Goods of $222.1 million, down 28.7% from $311.4 million.
  • North American profit from Groupon Goods of $36.5 million, down 13.1% from $42.0 million.
  • International revenue for Groupon Goods of $133.8 million, a 5.2% increase from $127.2 million.
  • International profit from Groupon Goods of $21.9 million, down 11.3% from $24.7 million.
  • A loss from continuing operations of $7.4 million compared to a $39.8 million loss.
  • A net loss of $6.8 million compared with a year-ago loss of $51.7 million.
  • Gross billings, which reflect the total amount consumers paid for Groupon vouchers, excluding applicable taxes and refunds, stood at $1.364 billion, a 1.9% decrease from $1.390 billion.

For the first half of the year, Groupon reported:

  • Total revenue of $1.336 billion, down 6.0% from $1.422 billion a year earlier.
  • A loss from continuing operations of $19.1 million compared to a $84.9 million loss.
  • A net loss of $27.2 million compared with a year-ago loss of $97.3 million.
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