Coupang’s Disappointing Sales Report Sparks Late-Night Slide
Retail Giant Falls Short of Expectations
Coupang Inc.’s shares took a hit in late trading on Tuesday, plummeting as much as 8.9% after the company reported retail net sales that failed to meet Wall Street’s projections. Despite a year-over-year increase, net sales of $6.14 billion fell short of analysts’ estimates of $6.24 billion.
Operating Income Misses Mark, Net Income Dips
The online retailer’s operating income of $109 million also slipped below projections, while net income took a hit due to losses at Farfetch, the luxury e-commerce platform acquired in January.
Strong Beat on Other Metrics Overshadowed
While the disappointing sales dominated the headlines, Coupang’s performance on other key metrics was impressive. The company’s sales growth remained in the double-digit range for the seventh consecutive quarter, driven by its expansion into new areas such as food deliveries. Net revenue surged 27% to $7.9 billion in the September quarter, exceeding analysts’ average estimate of $7.8 billion.
Growth Strategy Shifts Focus
Coupang, which pioneered one-day delivery in Korea, is now seeking growth through diversification into luxury goods and other areas. The company has also been investing heavily in Taiwan, as competitors Alibaba Group Holding Ltd.’s AliExpress and PDD Holdings Inc.’s Temu enter the Korean market.
Farfetch Ambitions
CEO Bom Kim aims to have Farfetch reach close to positive adjusted earnings before interest, taxes, depreciation, and amortization on a run-rate basis by the end of 2024. Despite the current setback, Coupang’s stock has still climbed an impressive 66% this year, driven by its first full year of profit in 2023.
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