Groupon Kicks Off First Analyst Day Amid Pivot to E-Commerce Site

Daily-Deal E-Mails Weren't Enough

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A lot has changed since Groupon sparked controversy in the 2011 Super Bowl, when its ad seemed to make light of celebrity causes like Tibet.
A lot has changed since Groupon sparked controversy in the 2011 Super Bowl, when its ad seemed to make light of celebrity causes like Tibet.  

Groupon, which is hosting its first analyst day, will tout profit and revenue growth plans today as the daily-deals company shifts from an e-mail model to a full-blown e-commerce site.

In presentation slides posted on its website, Groupon said it expects revenue growth of more than 15% next year, which would equate to at least about $3.6 billion, in line with analysts' estimates. Adjusted earnings will rise even faster, with the company projecting a more than 25% increase next year.

CEO Eric Lefkofsky has been working to make Groupon a marketplace for deals where consumers can shop the way they already do on sites like Mr. Lefkofsky is banking on growth in mobile and listings of local businesses to help offset a decline in e-mail effectiveness and demand for goods that has outpaced the company's ability to build out fulfillment infrastructure, according to the slides.

Groupon founder Andrew Mason was replaced as CEO by Mr. Lefkofsky in early 2013 after a period of disappointing results and missed forecasts.

The event in Chicago today is bringing together analysts and investors for a day of presentations from Groupon's senior management. It's scheduled to begin at 11 a.m. local time.

The forecast for adjusted earnings before interest, taxes, depreciation and amortization to rise more than 25% in 2015 would equate to at least about $308 million, based on this year's results so far and the company's projection for the fourth quarter. Analysts expect $350 million on average, based on estimates compiled by Bloomberg.

2017 Forecast
In the presentation slides, the company also forecast revenue growth of more than 20% by 2017. Groupon said it will sustain double-digit percentage growth in its local division in North America.

While Groupon has been adding new features such as a grocery loyalty program and listings of local businesses, customers have been slow to embrace the company's shift to an e-commerce site. Lately, though, there have been signs of improvement.

Last month, the company reported third-quarter profit that beat analysts' estimates. It also said it hired advisers to evaluate financial and strategic options for its businesses in Asia. Groupon is seeking partners to help grow businesses such as South Korea's Ticket Monster.

~ Bloomberg News ~

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