Yahoo Finance Coupang Slides After Quarterly Profit Misses Estimates
(Bloomberg) -- Coupang Inc., facing mounting competition in e-commerce, declined in late trading after first-quarter earnings came in shy of analysts’ estimates.
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Adjusted earnings before interest, taxes, depreciation and amortization rose 17% to $281 million, the company said in a statement Tuesday. Analysts had projected $283.3 million. Net income plunged 95% after the company included losses from Farfetch Holdings Plc, the online luxury company it acquired in January.
The shortfall overshadowed stronger-than-expected sales growth. South Korea’s largest online retailer reported a revenue increase of 23% to $7.1 billion, topping the average projection of $6.95 billion. Excluding Farfetch, adjusted Ebitda was $312 million.
The shares fell around 4% to $22.40 in extended US trading after the results were released. They had been up 46% this year through the close.
Coupang, which popularized early and one-day delivery in Korea, posted its first full year of profit in calendar 2023. It’s now seeking growth from new markets and continuing to invest in Korea as Alibaba Group Holding Ltd.’s AliExpress and PDD Holdings Inc.’s Temu make an aggressive push into the country.
Coupang plans to “continue investing billions of dollars in capex over the next several years,” Chief Executive Officer Bom Kim said during an earnings conference call. It aims to increase the speed of delivery across the market and make free delivery available to even the most remote corners of Korea, including secluded islands and mountain settlements that currently do not have access to its fastest delivery options.
Such steps will help fend off competitors from China, he said.
“Customers can compare when purchasing at multiple retailers with a swipe of a finger,” Kim said. “So we have to continue to invest and innovate, to provide the best experience to win the purchase every single time.”
In 2024, Coupang expects to close the year with adjusted Ebitda losses for the developing offerings segment — which includes Farfetch, food delivery and video streaming services — of around $750 million, up about $100 million. Farfetch is expected to achieve close to a positive adjusted Ebitda on a run-rate basis by the end of this year.
Read More: Coupang Soars After Loyalty Perks Lift Sales Above Estimates
Coupang’s active customers in the product commerce segment — shoppers who ordered at least once directly from its app or website during the period — rose to 21.5 million in the March quarter, up 16% from a year ago.
--With assistance from Vlad Savov.
(Updates with comments from CEO from sixth paragraph.)
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