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Groupon CEO Explains His Four-Part Strategy

Groupon CEO Explains His Four-Part Strategy

Shares of Groupon Inc (NASDAQ: GRPN) skyrocketed nearly 30 percent on Friday after the company reported a strong fourth quarter, which included an earnings beat and EBITDA guidance raise.

Speaking to Bloomberg TV on Friday, Groupon CEO Rich Williams discussed how the company plans to continue its momentum moving forward.

Williams discussed several key initiatives that Groupon will focus on moving forward. Specifically, the company hopes to improve its Goods margins, remove "empty calories" from its business, grow the customer base and improve the overall customer experience.

Related Link: Brean Reiterates Buy On Groupon Following 'Encouraging' Q4 Results

Williams acknowledged that the company has been working on these initiatives over the past "100 days or so" and achieved progress that was "faster than expected." However, he added that "our work isn't done" as the company needs to prove to investors it can perform well in a non-holiday quarter.

Commenting on Groupon's stock performance following a 90 percent drop from its IPO price, Williams suggested that the current share price is undervalued and a reason to continue buying back its own stock. However, his focus isn't on exploring a potential sale to an acquirer as the company has the sufficient resources to grow the business as a stand-alone company.

Finally, Williams discussed his cash spending plans for the coming year. The executive pointed out that Groupon began spending an additional $25 million on marketing expenses in the fourth quarter with a heavy focus on the online space while testing offline channels such as radio and billboards.

"We have a lot to do to unlock the value that is inherent in the brand," Williams concluded. "And we can unlock that through traditional online marketing but we also think there is a place for TV longer format video advertising that can help people understand where Groupon has changed."


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