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Coupang falls short of expectations for holiday quarter, but gives upbeat earnings outlook

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Coupang Inc. fell short of earnings and revenue expectations with its fourth-quarter results Wednesday, though the South Korean e-commerce company forecast a slimmer-than-anticipated loss for the full year ahead.

The company generated a fourth-quarter net loss of $405.0 million, or 23 cents a share, compared with a loss of $82.8 million, or $2.38 a share, in the year-prior quarter. Analysts tracked by FactSet were anticipating a 19-cent loss per share on a GAAP basis.

Coupang
CPNG,
-0.20%

also reported a loss on the basis of adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $285.1 million, compared with an $81.6 million adjusted Ebitda loss in the same period a year earlier. Analysts had been modeling a $261 million adjusted Ebitda loss.

Revenue rose to $5.08 billion from $3.80 billion, while analysts were expecting $5.18 billion.

Chief Financial Officer Gaurav Anand said in Coupang’s earnings release that the company “entered 2022 focused on driving efficiencies and improving operating leverage.” The company’s gross margins for the first quarter are on track to improve by more than 250 basis points and hit their highest levels since the start of the pandemic, he said.

For the full year, Coupang anticipates a total adjusted Ebitda loss of less than $400 million. The FactSet consensus was for $623 million.

Coupang plans to start a “new financial reporting structure” during the first quarter as it will begin reporting results in two segments: product commerce and growth initiatives. The product-commerce segment includes the company’s core retail and marketplace businesses, as well as its grocery offering and advertising efforts. The growth-initiatives segment will house the company’s “more nascent” endeavors such as Coupang Eats and Coupang Play, as well as international and fintech efforts.

The company expects that its product commerce segment will be profitable on the basis of adjusted Ebitda by the fourth quarter of 2022, whereas it had a -2.6% adjusted Ebitda margin during the fourth quarter of 2021.

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