COUPANG slid in late trading on Tuesday (Nov 5) after reporting retail net sales that fell short of Wall Street’s expectations.
Net sales totalled US$6.14 billion, up from a year earlier but below analysts’ estimates of US$6.24 billion. Operating income totalled US$109 million, also slipping below projections. Net income fell in the quarter, reflecting losses at Farfetch, the online luxury company Coupang acquired in January.
Shares of Coupang dropped as much as 8.9 per cent in extended trading.
The disappointing sales overshadowed what was otherwise a strong beat for the Seattle-based online retailer on other metrics. The company’s sales growth was still in the double-digit range for the seventh consecutive quarter, propelled by its nascent business forays such as food deliveries. Net revenue grew 27 per cent to US$7.9 billion in the September quarter, the company said on Tuesday, above analysts’ average estimate of US$7.8 billion.
Coupang’s stock has climbed 66 per cent this year, aided by its first full year of profit in 2023. The company that helped popularise one-day delivery in Korea is now seeking growth by expanding into areas such as luxury goods. Coupang has also been investing in Taiwan as Alibaba Group Holding’s AliExpress and PDD Holdings’ Temu push into Korea, its biggest market.
Chief executive officer Bom Kim has said he aims to have Farfetch reach close to positive adjusted earnings before interest, taxes, depreciation and amortisation on a run-rate basis by the end of 2024. BLOOMBERG
