Groupon Appoints New CEO, Forecasts Weak 2016
Groupon Inc, the operator of daily deals website groupon.com, said co-founder Eric Lefkofsky was stepping down as chief executive and returning to the role of chairman, effective immediately.
The company also forecast current-quarter and 2016 revenue below analysts' expectations, sending its shares down 27 percent in extended trading on Tuesday.
Chief Operating Officer Rich Williams will succeed Lefkofsky as CEO, Groupon said.
The company also said it would spend $150 million-$200 million more on marketing annually and lower its focus on offering consumer electronics, which bring in higher revenue but yield lower margins.
"We are forced to make tough decisions, trading short-term pain for long-term gain in order to build a company that we're proud of..." Williams said on a conference call.
Groupon, which has started selling products online, is trying to transform itself into an online marketplace.
The company said the change in focus was expected to lower its current-quarter revenue by $50 million-$100 million.
Growth in the company's active customer base slowed to 4 percent in the third quarter from 6 percent in the prior quarter.
Groupon forecast 2016 revenue of $2.75 billion-$3.05 billion, below the average analyst estimate of $3.50 billion, according to Thomson Reuters I/B/E/S.
The company also reported lower-than-expected revenue for the third quarter, hurt by lackluster sales in North America and lower revenue from other markets.
The net loss attributable to the company widened to $27.6 million, or 4 cents per share, in the quarter ended Sept. 30, from $21.2 million, or 3 cents per share, a year earlier.
Revenue was flat at $713.6 million but missed analysts' estimate of $732.8 million.
Groupon shares were trading at $2.95 after the bell.
(Reporting by Kshitiz Goliya in Bengaluru; Editing by Anil D'Silva, Sayantani Ghosh and Kirti Pandey)