South Korea’s Coupang slides after quarterly profit misses estimates

COUPANG, facing mounting competition in e-commerce, declined in late trading after first-quarter earnings came in shy of analysts’ estimates.

Adjusted earnings before interest, taxes, depreciation and amortisation rose 17 per cent to US$281 million, the company said on Tuesday (May 7). Analysts had projected US$283.3 million. Net income plunged 95 per cent after the company included losses from Farfetch Holdings, 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 per cent to US$7.1 billion, topping the average projection of US$6.95 billion.

The shares fell about 5 per cent to US$22.44 in extended US trading after the results were released. They had been up 46 per cent this year through the close.

Coupang, which popularised 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 as Alibaba Group Holding’s AliExpress and PDD Holdings’ Temu make an aggressive push into the country.

Chief executive officer Bom Kim said during the last earnings conference call in February that he had high hopes for Farfetch and luxury fashion, a relatively new arena for his company.

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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 per cent from a year ago. BLOOMBERG