By Maria Armental
Coupang Inc.'s stock fell 6.5% to $33.05 on a projected deceleration in the second quarter from the year-ago period, which saw a business surge as the pandemic hit South Korea.
The South Korean e-commerce giant, backed by Japan's SoftBank Group Corp., in its first earnings report as a public company said it ended the March quarter with more than 16 million active customers, up 21% from the year earlier, while net revenues per active customer rose 44% to $262.
Overall, net revenue surged 74% to $4.21 billion, but Coupang's first-quarter loss widened to $295 million, in part tied to higher expenses related to its initial public offering in March along with hiring and technology investments.
"Due to the company's aggressive investment in fulfillment and a mix shift to grocery, we expect 2Q21 EBITDA losses to be larger than 1Q at -$159m, compared to our prior estimate of -$79m," Mizuho's James Lee, Ishant Goel and Wei Fang wrote.
Coupang Chief Executive Bom Suk Kim said during the company's earnings call that Coupang plans to expand its nationwide footprint by over 50% in the coming year.
And the company has pointed to significant investments, including the expansion of Coupang's fulfillment, logistics, and technology capabilities. As part of the expansion, Coupang said it has entered into construction contracts, which have remaining capital expenditures commitments of $149 million as of March 31.
"We expect that our future expenditures throughout Korea for both infrastructure and workforce-related costs will exceed several billion dollars over the next several years," the company said in a securities filing.
Mizuho analysts estimated that in the most recent business year third-party sellers accounted for about 40% of the value of merchandise sold, or GMV.
Mizuho cut Coupang's price target to $40 from $50, long-term position unchanged.
Write to Maria Armental at firstname.lastname@example.org
(END) Dow Jones Newswires