Groupon's shares plummeted by 17%, reaching a new record low, during the company's third quarter.
Groupon, the popular daily deals and internet voucher platform, has seen a decline in popularity among consumers, according to recent reports. Despite this, the company's quarterly revenue for the period ending 30 September 2022 stood at $568.6 million, marking a 32% year-on-year increase.
Analysts had predicted a revenue of $590 million for the quarter. However, Groupon's shares plummeted by 17% to a record low of $3.25 in after-hours trading, reflecting the uncertainty in the market.
The company's net loss for the third quarter of 2022 was a modest $3 million, a significant improvement from the $54 million loss during the same quarter last year. This improvement can be attributed to the growth of Groupon Goods, the company's e-commerce site, which has reached close to $500 million in annual sales.
Groupon Goods offers deals on a wide range of products, including designer sunglasses, big-screen televisions, and most-wanted toys. The platform is expected to be a great gifting destination during the upcoming holiday season. In fact, Groupon Goods has evolved into a second major category for the company, providing a much-needed boost to its revenue.
However, Groupon has faced challenges in appealing to consumers outside the US. The company has reportedly struggled to expand its business in Europe, with around 300 of its workers in the UK facing potential job losses. Approximately 5% of Groupon's UK workforce has been affected by redundancies, according to a statement from the company.
Groupon is working to redeploy some employees to other roles within the business. The company's CEO, Andrew Mason, stated that the company's solid performance was offset by continued challenges in Europe.
Meanwhile, Groupon's competitor, LivingSocial, has also faced financial struggles. In October, it was reported that LivingSocial recorded a net loss of $566 million during the quarter. LivingSocial's management, led by CEO Tim O'Shaughnessy, is working to turn the company around.
Despite the challenges, Groupon remains optimistic about its future. With a strong e-commerce presence and a focus on providing value to its customers, the company is well-positioned to weather the storm and continue to grow in the competitive online marketplace.
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