Flagging demand translates as missed target for GrouponGroupon, the largest daily-deal Web site, reported third-quarter sales that missed estimates as demand faded for online coupons.
Net loss was $2.98 million, the Chicago-based company said yesterday in a statement. Sales rose 32 percent to $568.6 million, missing a $591 million estimate.
Groupon, which has lost 80 percent of its value since holding an initial public offering a year ago, is struggling to offset the declining popularity of daily deals. As it relies on new sources of revenue including the e-commerce service introduced last year, Groupon Goods, margins are thinning, said Sameet Sinha, an analyst at B. Riley & Co. in San Francisco.
“The core business is slowing down dramatically and this other business is growing really fast,” Sinha said in an interview before the results. “It is very low-margin revenue so far.”
Its shares fell in extended trading following the report. Earlier, the stock advanced 4.3 percent to $3.92 at the close in New York.
The company said yesterday it’s eliminating 80 sales jobs as it automates its sales and marketing operations. It has over 12,800 employees. “Groupon announced several months ago it would be using technology to increase productivity through automation,” Julie Mossler, a spokeswoman.
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