Coupang ($CPNG) showcased robust annual results for the third quarter, exceeding revenue expectations as the e-commerce powerhouse experienced growth across its operational segments. The firm, primarily serving customers in South Korea, announced adjusted earnings of $0.06 per share for the September quarter, a slight increase from $0.05 recorded the previous year.
Analysts from Capital IQ had anticipated normalized EPS of $0.01. Coupang's overall revenue surged 27% to $7.87 billion, surpassing the market consensus of $7.73 billion. However, net income dipped to $0.04 per share from $0.05 in the comparative quarter of 2023, mainly due to operating losses associated with Farfetch, the luxury online retailer acquired earlier this year.
Consequently, Coupang's shares fell 6.1% in premarket trading on Wednesday. Chief Executive Bom Kim indicated on an earnings call that the integration of Farfetch is yielding significant operational efficiencies. He remarked, 'Our team is making significant progress in driving operational efficiency through disciplined execution.' Notably, the company achieved 'near breakeven profitability' at Farfetch in the third quarter, ahead of the initial year-end target.
Meanwhile, product commerce sales increased by 16% to $6.89 billion, supported by an 11% rise in active customers, which now total 22.5 million. Chief Financial Officer Gaurav Anand highlighted the expansive growth potential: 'As we continue to be a very small portion of the total commerce spend in Korea, we see a massive runway for growth ahead of us.' Revenue from the developing offerings division, which encompasses Farfetch, skyrocketed to $975 million from $218 million a year earlier.
However, this segment reported negative adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $127 million compared to a loss of $161 million in the prior year. Anand informed analysts that despite ongoing fluctuations in the level of losses quarterly, the recent improvements were primarily influenced by enhancements within Coupang Eats and Farfetch.
Furthermore, gross profit margin showed an increase of 350 basis points, reaching 28.8% for the quarter, although total operating costs and expenses climbed to $7.76 billion from almost $6.1 billion year-over-year..