Groupon Inc. shares dropped in the extended session Thursday after the daily-deals site missed Wall Street estimates in its quarterly results, and said it was cutting nearly a fifth of its workforce.
shares fell as much as 10% after hours, following a 3.9% decline in the regular session to close at $4.90, while the S&P 500 index
gained 1.8% and the tech-heavy Nasdaq Composite Index
The company reported a fourth-quarter loss of $55.3 million, or $1.82 a share, versus net income of $29.4 million, or 90 cents a share, in the year-ago period. The adjusted loss, which excludes stock-based compensation expenses and other items, was 38 cents a share, versus earnings of 18 cents a share in the year-ago period.
Revenue fell to $148.2 million from $223.2 million in the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of 33 cents a share on revenue of $160.1 million.
The company also said it was cutting 500 jobs worldwide, about 17% of its workforce of 2,904 as of the end of 2022. Groupon expects the layoffs to be complete by the end of its June-ending quarter. With that and other cost reductions, Groupon said it is on track to reduce annual costs by $250 million.
Groupon said that because of its “turnaround strategy” and an uncertain macro environment, it was withdrawing its forecast for the year. Analysts had estimated a net income of 56 cents a share on revenue of $642.9 million for the year.
“We are in the midst of executing a transformation strategy that we believe will allow Groupon to unlock its full potential,” said Kedar Deshpande, Groupon’s chief executive, in a statement. “While we faced some macroeconomic headwinds in 2022, we also believe that we did not move quickly enough to adapt our business model to meet the new and emerging needs of our local merchants and customers.
“Looking ahead to 2023, we are focusing the entire organization on three areas: improving the supply side of our marketplace to drive customer demand, leveraging an improved inventory base to make our marketing and promotional spend more efficient, and doing both of these against a backdrop of a meaningfully streamlined cost structure and much better operational rigor,” Deshpande said.
Back in 2011, when Groupon went public at $20 a share and opened at $28 a share, the company was valued at more than $13 billion, versus its current $149.1 million valuation, a drop of nearly 99%.