On Tuesday, the company announced that the board had voted to replace Lefkofsky, who takes over as the company's chairman, with Williams, who was just appointed as COO in June. Lefkofksy had served as permanent CEO since Aug. 2013, after replacing former chief Andrew Mason, who was fired by the board earlier that year. Groupon also announced that Ted Leonsis will also step down from his current position as chairman, but will remain on the board as the lead independent director.
“Under Eric, we made significant strides in establishing our marketplace," said Williams in a statement. "As CEO, my top priority is to unlock the long-term growth potential in the business by demonstrating everything the new Groupon has to offer."
The decision to name Williams, an
On the Chicago-based company's third-quarter earnings call, outgoing CEO Lefkofsky said that growth had been stunted by a "fragmented international business" and a dependence on a "deteriorating" email business. Groupon has already started to make cuts abroad after announcing in September that it would lay off 1,100 people and exit seven countries as it restructures its global operations.
Lefkofsky's sentiments were echoed by Williams, who said in a statement and on the company's earnings call that he hopes to reverse Groupon's fortunes by increasing investment in marketing and focusing on the sale of physical goods with higher profit margins.
“I’m assuming the CEO role with three immediate priorities,” Williams said. “First, we will renew our investment in customer acquisition to introduce more new customers to our marketplace and accelerate growth. Second, we will increase our focus on streamlining our international operations to ensure we are operating as lean and efficiently as possible. Finally, we will shift our Shopping category away from lower margin ‘empty calorie’ products to grow a sustainable, healthy Goods business with stronger margins."
On Tuesday, the company also announced earnings for the three months ending on Sept. 30 and said that revenue came in at $713.6 million, down from $714.3 million in the same period last year. Groupon said much of that could be attributed to unfavorable foreign exchange rates, which, when removed, show a 7% increase in revenue year-over-year.
The company also reported a net loss of $27.6 million or 4 cents per share. Excluding one-time items, the company had earnings of about $32.5 million, or 5 cents a share, which was higher than the average estimate of 2 cents a share from analysts polled by
Groupon said it expected an adjusted loss of 1 cent a share to profit of 1 cent a share on revenue between $815 million and $865 million in its fourth quarter. Analysts polled by Yahoo expected earnings of 7 cents a share on revenue of $956.8 million.
The stock's more than 25% drop after-hours wiped out about $700 million from the company's market capitalization. Groupon is now valued at just under $2 billion.
