Coupang loses $295 million in debut quarterly report
Coupang reported a massive quarterly loss just two months after its New York listing, missing expectations by a wide margin as it made its first earnings announcement as a public company.
The disappointing results came as the e-commerce market booms, but also as competition heats up, with other companies slashing prices and upping their service standards to counter Coupang’s aggressive expansion.
In the quarter ended March 31, the company’s net loss was $295 million, compared to a net loss of $105 million in the same quarter the previous year. On a per share basis, Coupang lost $0.68 per share. Analysts forecast a $0.16 loss per share.
Growth remained fast, and its balance sheet was strong. Coupang's total net revenues were up by 74 percent in the first quarter to $4.2 billion. As of the end of last quarter, it had $4.3 billion of cash and cash equivalents on hand.
Coupang, which has been in business for a decade and has never made money, poured billions of dollars into building out infrastructure and inventory so it can provide fast and efficient deliveries from its own warehouses. While the strategy has pleased consumers, the company has not been able to turn a profit.
As of the end of the first quarter, the company had an accumulated deficit of $4.4 billion.
Following the initial public offering and toward the end of the first quarter, a price and service war started to heat up. Emart offered a low-price guarantee, TMON negative commissions, Naver faster payments to merchants and Lotte Mart more loyalty points. Market Kurly put items on sale, but did not issue a low-price guarantee.
Coupang offered free delivery even to non-members.
The company is also facing a growing threat of labor disputes as complaints about working conditions and compensation grow.
“We are excited to be reporting our first quarter results, because we think they validate the investments we have made and speak to the continued execution along our strategy,” said Kim Bom, Coupang CEO, during a conference call on Wednesday. “We are just getting started. While our business will continue to evolve, we won’t change how we operate. We won’t hesitate to make difficult decisions and bold investments for the long-term.”
Kim was vague about overseas expansion.
“We will examine and explore opportunities in new markets as they come to us and we will pursue them,” Kim added.
Analyst Lee Jee-young from NH Investment & Securities projected Coupang's stock price to improve because the company “is definitely in the lead of global e-commerce in terms of growth.”
Coupang’s stock has been declining steadily since it started trading. It was offered for $35.00, opened at $63.50, peaked at $69.00 and ended the day just prior to the first-quarter announcement at $35.33. It dropped in after-hours trade to $34.16.
BY JIN MIN-JI [firstname.lastname@example.org]