Coupang declines after retail sales miss estimates

(Bloomberg) — Coupang Inc. fell in late trading Tuesday after net retail sales fell short of Wall Street expectations.

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Net sales were $6.14 billion, up from a year ago but below analyst estimates of $6.24 billion. Operating income was $109 million, also below forecasts. Net income fell in the quarter, driven by losses at Farfetch, the online luxury company that Coupang acquired in January.

Coupang shares fell as much as 8.9% in extended trading.

The disappointing sales overshadowed the Seattle-based online retailer's otherwise strong success in other metrics. The company's revenue growth was still double-digit for the seventh consecutive quarter, driven by its emerging businesses such as food delivery. Net sales rose 27% to $7.9 billion in the September quarter, the company said in a statement on Tuesday, above analysts' average estimate of $7.8 billion.

Coupang's stock is up 66% this year, helped by its first full year of profits in 2023. The company, which helped popularize one-day delivery in Korea, is now seeking growth by expanding into areas such as luxury goods. Coupang has also invested in Taiwan as AliExpress is owned by Alibaba Group Holding Ltd. and PDD Holdings Inc.'s Temu are making inroads into Korea, its largest market.

Chief Executive Officer Bom Kim said during a post-earnings conference call that Farfetch nearly broke even on an adjusted earnings before interest, taxes, depreciation and amortization basis last quarter, a target he had previously aimed to achieve by the end of 2024.

Farfetch's adjusted loss before interest, taxes, depreciation and amortization fell to $2 million in the quarter from $31 million in the April-June period.

(Updates with details from post-earnings conference call in 6th and 7th paragraphs.)

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