Coupang falls after Q2 product trading revenue falls short of expectations

Coupon (NYSE:CPNG) was trading lower early Wednesday after posting a mixed second-quarter earnings report. Revenue rose 25.3% year over year but missed consensus estimates by $70 million. Excluding Farfetch, revenue growth was 18% year over year on a reported basis and 23% on a currency-neutral basis basis. Gross profit rose 41% year-on-year in the quarter to $2.1 billion. Excluding Farfetch, gross profit was $1.9 billion, up 27% year-on-year, and gross profit margin was 28.3%.

Mizuho Securities noted that Coupang’s (CPNG) management maintained its revenue guidance in the low 20s for fiscal 2024 and EBITDA loss from developing offerings at $650 million. This gave the company more confidence in its fiscal 2026 estimate of $3.1 billion and maintained its price target at $23. Mizuho’s rating on Coupang (CPNG) is Neutral due to valuation premium, regulatory uncertainty, and Softbank headwinds, but the company is incrementally positive about the e-commerce company’s leading position in the category.

Morgan Stanley has maintained an Overweight rating on Coupang (CPNG) following the release of its earnings results. The company stressed that while product trading revenue fell slightly, it believes this reflects a higher 3P mix rather than growth concerns.

During the earnings conference call (transcript), Coupang (CPNG) executives discussed the Farfetch integration in detail.

“At Farfetch, as we stated last quarter, our goal is to generate near positive adjusted EBITDA on a running-rate basis by the end of the calendar year. We are on track and on track to achieve those goals for the year. Although we are still very early in our journey.”

“It is important to recognize that we see enormous potential in the markets we serve that is still largely untapped. Our strategy to leverage that potential is unwavering. Disciplined investment and operational excellence to deliver WOW to our customers, the best selection, service and savings. We believe that customer satisfaction is key to maximizing long-term opportunities for our suppliers, merchants, employees and shareholders.”

Coupang (CPNG) shares fell 2.37% in the pre-market phase at the level of USD 20.67.