South Korean e-commerce giant Coupang's Q3 net sales fell short of expectations, striving to achieve profitability before the end of the year with Farfetch

According to the Zhitong Finance APP, the stock price of South Korean e-commerce leader Coupang (CPNG.US) plummeted over 8% in after-hours trading on Tuesday, following the company's report that net sales focused on the retail side fell short of Wall Street analysts' expectations. The financial report showed that the company's Q3 net sales in the retail segment totaled $6.14 billion, up 16% year-on-year, but below the consensus estimate of $6.24 billion from Wall Street analysts. Operating profit totaled approximately $109 million, also below analysts' expectations, but higher than the approximately $88 million from the same period last year. Additionally, Coupang's net profit in the third quarter saw a significant year-on-year decline of about 30%, amounting to only about $64 million, reflecting the massive losses incurred from the global top online luxury goods sales platform Farfetch, which was heavily acquired by Coupang in January. Excluding Farfetch, the net profit attributable to Coupang shareholders in the third quarter was approximately $108 million, far exceeding the same period last year. Under the pressure of disappointing net sales figures, Coupang's stock price fell by about 8.9% in after-hours trading. However, some analysts noted that the disappointing sales figures overshadowed the relatively strong performance of this South Korean e-commerce giant in other metrics. Driven by emerging businesses such as food delivery, the e-commerce giant has achieved double-digit total revenue growth for seven consecutive quarters. In the performance announced in after-hours trading on Tuesday, the company reported a 27% year-on-year increase in total revenue for the third quarter, reaching $7.9 billion, surpassing the analysts' consensus estimate of about $7.8 billion. The company's Q3 gross profit increased by 45% year-on-year to $2.3 billion, with a gross margin of approximately 28.8%, an increase of 350 basis points year-on-year. Under NON-GAAP standards, Coupang's adjusted EBITDA profit was approximately $343 million, a year-on-year increase of 44%, with an EBITDA profit margin of 4.4%, up 50 basis points from the same period last year. Excluding the gains and losses related to Farfetch, the company's adjusted EBITDA profit was significantly $345 million, with an EBITDA profit margin of 4.6%. In terms of stock price, Coupang's stock has surged 66% year-to-date, significantly outperforming the S&P 500 index, thanks to its first-ever full-year profitability data in 2023. This e-commerce giant, which plays an important role in South Korea's online consumption sector and has helped popularize the "same-day delivery model," is now seeking new performance growth points by expanding into luxury goods and other areas. However, it is worth noting that with Chinese e-commerce giants Alibaba Group's AliExpress and Pinduoduo's Temu entering Coupang's largest market in South Korea, Coupang faces increasingly aggressive competitive pressure. Referred to by some investors as the "Amazon of South Korea," Coupang aims to develop its luxury goods business into a core revenue-generating segment for the company in the future, leveraging its acquisition of one of the largest online luxury goods sales platforms, Farfetch. Coupang CEO Bom Kim stated that his goal is to drive the Farfetch business towards breakeven or profitability in terms of adjusted EBITDA profit data by the end of 2024