(Bloomberg) — Coupang Inc., facing growing competition in e-commerce, fell in late trading after first-quarter profit fell short 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 expected $283.3 million. Net profit plunged 95% after the company included losses at Farfetch Holdings Plc, the online luxury company it acquired in January.
That deficit overshadowed stronger-than-expected sales growth. South Korea’s largest online retailer reported a 23% increase in revenue to $7.1 billion, beating the average forecast of $6.95 billion. Excluding Farfetch, adjusted Ebitda was $312 million.
Shares fell about 4% to $22.40 in extended U.S. trading after the results were released. They were up 46% this year through the close.
Coupang, which popularized early and one-day delivery in Korea, recorded its first full year of profits in calendar year 2023. It is now looking to expand into new markets and continues to invest in Korea under the name of AliExpress and PDD Holdings Inc. of Alibaba Group Holding Ltd. The Temu of … are making an aggressive inroad into the country.
Coupang plans to “continue to invest billions of dollars in investments over the coming years,” CEO Bom Kim said during an earnings conference call. Its goal is to increase delivery speed across the entire market and make free delivery available even in the most remote areas of Korea, including remote islands and mountain villages that currently do not have access. to the fastest delivery options.
Such measures will help fend off Chinese competitors, he said.
“Customers can compare purchases across multiple retailers with the swipe of a finger,” Kim said. “So we must continue to invest and innovate, to provide the best possible experience to win the purchase every time. »
In 2024, Coupang expects to close the year with adjusted Ebitda losses for the developing deals 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 positive adjusted Ebitda on a current rate basis by the end of this year.
Read more: Coupang soars after loyalty benefits boost sales above estimates
Coupang’s active customers in the produce commerce segment – shoppers who ordered at least once directly from its app or website during the period – reached 21.5 million in the March quarter, i.e. an increase of 16% compared to last year.
–With the help of Vlad Savov.
(Updated with CEO comments from sixth paragraph.)
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