(Bloomberg) — Coupang Inc. slid in late US trading after third-quarter profit missed analysts’ estimates, overshadowing a better-than-expected 21% revenue surge and a record number of active customers.
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Net income in the period was little changed at $91.3 million, compared with an average projection of $119 million. The company, South Korea’s largest online retailer, reported net revenue of $6.2 billion for the September quarter, beating an average analyst estimate of $5.9 billion.
The shares plunged as much as 9.6% in extended trading. Even before the drop, Coupang was down more than 50% from the stock’s debut price. The company, which went public in New York in 2021, has been dogged by concerns that Alibaba Group Holding Ltd. or PDD Holdings Inc.’s Temu may expand across Asia. A global economic downturn is also weighing on consumer spending as people tighten their belts.
Even with the setback, Coupang is one of the few major e-commerce companies outside of China that’s in the black. Backed by SoftBank Group Corp., it’s posted net profits since the third quarter of 2022, helped by cost cuts and a membership service akin to Amazon.com Inc.’s Prime. The company helped popularize same-day delivery in South Korea.
Like many of its peers, Coupang grew during the pandemic to meet demand for goods online. As the Covid-era boom dissipated, the company has tried to sustain growth through expanding its delivery network. It also retreated from some markets while planning investments in more lucrative regions.
Coupang exited Japan, but it’s setting its sights on Taiwan. The company launched its “Rocket Delivery” service last year and opened its second logistics center in Taiwan this month.
Customer growth accelerated for the third consecutive quarter. Coupang’s active customers, or those who ordered at least once directly from its app or website during the quarter, rose 14% to a record 20.4 million during the quarter. And it generated free cash flow of $1.9 billion for the trailing 12 months, compared with a negative $1.1 billion a year ago.
In Taiwan, Coupang “helped 12,000 small business export their products to a new market over the past year,” Chief Executive Officer Bom Kim said in a statement.
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