Groupon (Nasdaq: GRPN) Earnings Preview: Two Numbers to Watch
By Tara Clarke, Associate Editor
GROUPON-A NASDAQ: GRPN Feb 20 02:37 PM loading chart... Price: 10.24 | Ch: 0.22 (2.1%)Groupon Inc. (Nasdaq: GRPN) will report Q4 2013 earnings after closing bell today (Thursday). GRPN stock gained 1.2% in pre-market trading Thursday, despite projections of a slow quarter.
The current Wall Street consensus expectation is earnings per share (EPS) gain of $0.02 per share on $718.67 million in revenue, compared to a loss of $0.01 per share in the same period a year ago.
For Q1 2014, analysts expect an EPS of $0.06 on $669 million in revenue.
Groupon has topped Wall Street estimates only once in the past four quarters - meeting them twice and missing them once.
Like many other U.S. retailers, Groupon's overall growth was likely stymied by the foul weather that's depressed holiday sales and all recent U.S. retail numbers.
That said, Groupon's future health will be measured by the two numbers to be watched today - mobile growth and product diversification.
Groupon (Nasdaq: GRPN): Watch to Watch in Earnings TodayNo. 1: Groupon's Mobile Growth
The mobile industry is booming, replacing a slowing PC industry.
Over 56% of Americans are smartphone users, according to Pew Researchin 2013. The number of U.S. mobile coupon users will rise from 12.3 million in 2010 to a projected 53.2 million in 2014, according to eMarketer.
The shift to mobile for online purchases requires Groupon to meet consumers' mobile demand for success.
And so far, it's doing just that.
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The company said that more than 9 million users downloaded its mobile app in Q3 2013 alone.
More than 50% of Groupon transactions are now happening over mobile platforms like smartphones and tablets, while email sales are now less than 40%. In a press release, Groupon said that over the holiday weekend that spanned four days, more than 55% of transactions in North America were completed on mobile devices - billings increased 30% compared to the same period in 2012.
Look at mobile numbers in today's Q4 2013 earnings release to see if growth reflects industry increases.
No. 2: Efforts to Diversify
On Jan. 2, Groupon announced it purchased Korean e-commerce company Ticket Monster from competitor LivingSocial for $260 million.
The acquisition is intended to strengthen waning revenue growth rates, and to help Groupon's international expansion - the online coupon market is worth $4 billion annually in North America, compared to $28 billion annually across globe in total.
Quickly thereafter, on Jan. 13, Groupon acquired flash fashion retailer ideeli for $43 million. The purchase was GRPN's first major move into the fashion category and is a step towards developing more diversified products that are beyond simply offering a daily deal to consumers.
Updated numbers on the outlook of these two acquisitions will speak strongly to Groupon's seriousness on rapidly growing its brand.
Groupon shares presently sit at $10.24 per share, up 2.19% as of 1:30 p.m. EST. Over the last year, Groupon stock is up 82.83%, but it's down a little over 13% since the New Year.
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