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It’s Confirmed: Groupon Is Back

Groupon stock has been on a tear this year.

Shares of the online-deals company jumped 7.3% Wednesday after it reported a profit and delivered a better-than-expected forecast for the current quarter. A year ago, Groupon was losing money. It looked like Amazon and other online players were simply too dominant.

Groupon recently restructured its business, cutting jobs and exiting some international markets that weren’t seeing strong results. The decision seems to be paying off. The company has trimmed administrative expenses and ended up spending less on marketing during the quarter than was initially expected.

Management is running international operations more efficiently, and Groupon is adding more net new users both domestically and abroad. The company said it now has 32.5 million North American customers and 16.6 million international members who have used Groupon at least once within the last year.

The impact of Groupon+, which has pushed the stock higher in recent months, hasn’t even played out yet in the numbers. Groupon+ is a new card-linked product that lets users get discounts applied directly to their cards, without relying on printed or mobile coupons. This was the first reported quarter that included Groupon+ results. Management said that while the product “remains a very small portion of transactions,” early adoption has been encouraging.

Groupon+ is attacking a long-time issue for the company. “Friction is the enemy here, and we’re intensely focused on removing it on our site and in our apps,” CEO Rich Williams said.

Groupon shares are up 54% so far this year.


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