In the fourth quarter, Groupon Inc.’s profits from its Goods division grew nearly 17%, even as its revenue from the division fell about 9%, the company reported Wednesday. Goods is the division of Groupon that sells physical goods.
That reflects CEO Rich Williams‘ ongoing directive to reduce so-called “empty calories,” the low- to negative-margin products that drive short-term increases in revenue but do little to generate long-term profits.
While Goods had been one of Groupon’s fastest-growing channels, over the past year the company has come to view the division as complementary to its core local offers, John Wild, vice president, North America marketing, recently told Internet Retailer. “Goods is a great customer activator, it helps us acquire new customers and introduce them to our brand,” he says. “But where we stand out is our ability to help local businesses market.”
For the fourth quarter ended Dec. 31, Groupon, No. 26 in the Internet Retailer 2017 Top 500, reported:
- Total revenue of $873.2 million, down 3.5% from $904.9 million a year earlier.
- North American revenue of $574.7 million, down 11.7% from $650.8 million.
- International sales of $298.5 million, up 17.5% from $254.1 million.
- Groupon Goods revenue of $539.9 million, down 9.3% from $595.0 million.
- Groupon Goods profit of $89.3 million, up 16.7% from $76.5 million.
- North American revenue for Groupon Goods of $333.9 million, down 20.9% from $421.9 million.
- North American profit from Groupon Goods of $54.7 million, up 8.5% from $50.4 million.
- International revenue for Groupon Goods of $206.1 million, a 19.1% increase from $173.1 million.
- International profit from Groupon Goods of $34.6 million, up 32.6% from $26.1 million.
- A gain from continuing operations of $51.1 million compared with a $39.5 million loss.
- Net income of $50.8 million compared with a year-ago loss of $50.2 million.
- Gross billings, which reflect the total amount consumers paid for Groupon vouchers, excluding applicable taxes and refunds, stood at $1.582 billion, a 1.5% decrease from $1.606 billion.
For the full year, Groupon reported:
- Total revenue of $2.844 billion, down 5.6% from $3.014 billion a year earlier.
- A gain from continuing operations of $28.6 million compared with a $166.2 million loss.
- Net income of $26.6 million compared with a year-ago loss of $183.3 million.