Coupang Inc., the U.S.-listed parent of Coupang in Korea, has been reeling in the aftermath of a massive personal data leak. On the 24th (local time), Coupang Inc. (hereafter Coupang) closed at $15.50 on the New York Stock Exchange. That is near the 52-week low of $14.92 and half of the period high of $34.08.
Coupang will release its second-quarter results after the U.S. market closes on the 4th of next month. That will be early morning on the 5th in Korea. On the 28th, financial data firm Investing.com said local securities firms' average second-quarter revenue estimate is $9.05 billion (about 13.26 trillion won). That is up 6.2% from $8.52 billion in the second quarter last year, but lower than the first quarter's single-digit revenue growth rate (8%), which was the first time since the company's founding that growth fell into the single digits. The earnings per share (EPS) estimate is -$0.219, with the loss expected to widen from the first quarter (-$0.15).
What is weighing on the second quarter is not a "Talpang (quitting Coupang)" exodus but the expense left by the massive personal data leak. First, the 624.681 billion won penalty surcharge imposed by the Personal Information Protection Commission on the 11th of last month will be fully reflected in the results. It is the largest amount since the Personal Information Protection Act took effect. Coupang is preparing an administrative lawsuit to contest the disposition, but regardless of the lawsuit, the amount is recognized in the accounts immediately. A Coupang official said, "Under U.S. accounting standards, money that will go out is reflected on the books right away, and if we win later, we get it back."
The second burden is the discount coupons distributed as an apology. After the leak, Coupang distributed free vouchers worth 50,000 won to about 33.7 million users who received a notice of harm. Because the usage deadline was Apr. 15, the remaining expense not recognized in the first quarter will be reflected this quarter.
◇ Coupang target price cuts continue
Even stripping out the one-off expense, the profitability outlook is not bright. Investment bank Bernstein last month lowered its Coupang target price from $15 to $12 and maintained a "sell" rating. The reason is fixed costs. Because Coupang builds logistics centers nationwide and directly employs delivery staff, when revenue grows quickly, fixed costs are spread and margins improve. Conversely, when revenue growth slows, the same fixed costs erode profits. Bernstein also noted that the direct-purchase model, in which Coupang buys and sells goods itself, boomerangs into inventory burden if sales falter.
Citi in May cut its investment rating from "buy" to "neutral" and lowered its profit estimates for 2026–2027 by up to 27% for Coupang. The change came from lowering the margin assumptions for its core Korea e-commerce business, which accounts for 84% of total revenue, rather than for new businesses.
There are counterarguments. Morgan Stanley kept an "overweight" rating, saying 80% of the departed Wow members had returned and the company's second-quarter revenue growth rate guidance exceeded its own estimates. It also viewed the decline in profitability as the result of a choice to carry out planned hiring and logistics investments on the premise of a sales recovery. Bank of America on the 20th maintained a "buy" rating, saying the share of daily users of the Coupang app has rebounded every month since the January low this year and is approaching the level before the leak.
The problem is that the headwinds do not end in the second quarter. The fire that broke out at the Coupang 32 Logistics Center in Seoknam-dong, Seo District, Incheon, on the 18th was extinguished after 109 hours and 40 minutes. With a total floor area of 299,000 square meters, it is 2.3 times the size of the Deokpyeong Logistics Center in Icheon that was completely destroyed in 2021. Restoration costs, inventory losses, and compensation expenses for nearby residents will start being reflected in results from the third quarter.
Insurance payouts will cover the losses, but there will be a time lag. Even with insurance processing, it typically takes two to three years to reach a settlement, making a temporary loss unavoidable. A retail industry official said, "A signal that Coupang has emerged from the shadow of the personal data leak will only be confirmed after it finishes recognizing the third-quarter logistics center fire expense."