Groupon Inc. said Monday its international sales slowed significantly in the second quarter, raising new concerns about popularity of online coupons even though the company met its profit projection for the quarter.
The Chicago-based daily-deal website posted net income of $28.4 million, or 4 cents a share, in the quarter ended June 30. In the year-ago quarter, Groupon lost $107.4 million, or 35 cents a share.
Revenue grew 45% to $568.3 million, from $392.5 million a year earlier. But international sales, which make up more than half of the company's revenues, only grew 31% to $308.1 million. In the first quarter, international sales, which are concentrated in Europe, more than doubled to $320.7 million.
Analysts expected Groupon to report second-quarter earnings of 3 cents a share on revenue of $573 million, according to Thomson Reuters.
Groupon blamed the weakness in Europe on unfavorable foreign exchange rates as well as regional economic problems that reduced demand for more expensive online coupons, such as laser hair removal and hotel stays.
"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," Andrew Mason, Groupon's chief executive, said in a statement.
Revenue concerns drove down Groupon's stock in after-hours trading. Shares closed at $7.55, up 11 cents.
In North America, Groupon's revenues rose 65.5% to $260.2 million. But a large part of North America's growth came from its division that sells movie tickets, travel vouchers, heart-rate monitors and other physical goods direct to consumers. Groupon Goods had revenues of $65.3 million, up from $19.2 million in the first quarter.
Wall Street analysts applauded the growth in Groupon Goods but are concerned that it is masking weakness in the company's North American online coupon business.
The company's concerns about Europe were reflected in the outlook it gave for the third quarter. Groupon expects revenue for the third quarter to be between $580 million and $620 million, an increase of between 35% and 44% compared with the third quarter 2011.