Groupon Soars After Push to Eliminate Hassles Begins to Pay Off
(Bloomberg) -- Groupon Inc.’s crusade to make its service easier to use is getting results.
Shares of the e-commerce service rose the most in more than a year after sales and adjusted earnings topped analysts’ estimates. The company’s annual forecast also handily beat Wall Street projections.
Groupon, once derided as a fad coupon site, has built a comeback on eliminating hassles from its service. It now offers deals through a streamlined mobile app and rolled out a program called Groupon+ that lets users get cash back by linking their credit cards. That’s helped give Groupon an edge in so-called local commerce -- the act of pairing up consumers with businesses in their neighborhoods.
“Across the board, you saw us deliver on our strategy,” Chief Executive Officer Rich Williams said in a phone interview. “We are firing on all cylinders.”
Earnings amounted to 3 cents a share in the first quarter, excluding some items. Analysts had expected a break-even performance. Revenue came in at $626.5 million, beating the $603.9 million prediction.
The Chicago-based company’s 2018 outlook also got a boost from its acquisition of Cloud Savings Co., which owns the online discount-code platform Vouchercloud.
“Groupon is well positioned to capitalize on its opportunity in local commerce and is a much better company than it has been in the past,” said Tom Forte, an analyst at D.A. Davidson & Co.
The shares gained as much as 13 percent to $5.48 on Wednesday, the biggest intraday increase since February 2017. The stock had been down 5.1 percent this year through Tuesday’s close.
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