Groupon names Lefkofsky CEO; revenue exceeds estimates | Wifi Walker, J B Chaparal Properties

Groupon names Lefkofsky CEO; income exceeds estimates

By Gerry Shih

SAN FRANCISCO (Reuters) – Groupon Inc named co-founder Eric Lefkofsky a arch executive and reported a record entertain for a North American business, signaling flourishing movement in a quip effort, and a shares rose roughly 20 percent.

The company, that also announced a $300 million share repurchase module on Wednesday, reported a better-than-expected 7 percent burst in second-quarter income to $608.7 million, as sales in a United States and Canada climbed 45 percent.

Lefkofsky, who was named halt CEO in February, has pushed on with his mobile-centric plan given associate owner Andrew Mason was transposed in February. The former CEO had presided over a high share cost decrease to next $5 from a $20 entrance in 2011.

The stock, that has gained 80 percent in 2013, rose to $10.35 in after-hours trade on Wednesday, a top given Jul 2012.

“I consider a news about installing Lefkofsky played a large part,” pronounced Tom White, an researcher during Macquarie Research. “Investors have been really tender by a swell he’s done given being done halt conduct and improving metrics quite in a North America business.”

With a core daily deals business indication in high decline, Groupon in new months has re-invented itself as a some-more normal e-commerce business that sells long-term deals, quite by a smartphone app.

Lefkofsky and other executives told Wall Street analysts on Wednesday that emailed deals, once a linchpin of Groupon’s sales strategy, now usually accounted for 40 percent of a quarterly revenue. Instead, Groupon’s business were increasingly logging into a site to hunt for products they were actively seeking, they said.

“It was usually a few brief years ago when email was all of a business,” Chief Financial Officer Jason Child said. “The good news for us is we see a many active conspirator of business enchanting with a marketplace many often. They’re browsing, they’re searching, they’re going in and typing in keywords.”

The difference, Lefkofsky added, was that Groupon was transforming from a “demand-generation business to a demand-fulfillment business.”

But association government warned it would take several buliding for Groupon to finish a change in instruction and entirely enter and contest in an greatly rival and swarming e-commerce marketplace dominated by giants like Amazon Inc and eBay Inc.

For Groupon to succeed, Lefkofsky pronounced it indispensable to concentration on enlightening a algorithms to benefaction products applicable to a user’s interests, while also improving a product apartment for sellers, that includes rewards tracking programs and credit label estimate tools.


Groupon’s sum billings, or a sum value of purchased products and services – of that a association takes a cut – rose 30 percent in North America, outpacing a 10 percent enlargement rate overall.

About 50 percent of a North American exchange came by smartphones and tablets, contra 30 percent a year ago, a association said.

Groupon’s success with mobile adoption has been noticed with sold preference on Wall Street. Groupon shares jumped 11 percent on Jun 14 when Deutsche Bank analysts upgraded a stock, attributing their confidence to a company’s swell on a mobile front.

Groupon’s income in a United States and Canada in a second entertain grew 45 percent, offsetting a 24 percent slip in Europe, a Middle East and Africa (EMEA) and a 26 percent tumble everywhere else.

Child told Reuters on Wednesday that while Groupon’s general opening has been weak, a company’s investment in shoring adult a European operations will compensate off soon.

North America continues to see clever expansion and we done good swell in EMEA that flipped to certain sum billings growth,” Child said. Gross billings in EMEA grew 4 percent in a second quarter. “We’re now changeable a concentration to a rest of a world.”

The Chicago-based association reported quarterly income of$608.7 million compared with $568.3 million a year ago. Analysts on normal approaching $606.2 million in revenue, according to Thomson Reuters I/B/E/S.

It posted a second entertain net detriment of $7.6 million, or 1 cent per share, compared with a year ago distinction of $28.4 million, or 4 cents a share.

Excluding one-time items, it warranted 2 cents a share, turn with analysts’ expectations.

(Reporting by Gerry Shih; Editing by Carol Bishopric)

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