What happened
Notable declines in fundamentals caused investors to bail from Jumia Technologies (JMIA 10.79%) stock on Tuesday. Following its release of quarterly results, the online retailer's shares fell by more than 17% in price. That was far steeper than the 1.2% drop of the bellwether S&P 500 index.
So what
In its second quarter, Jumia reported revenue of $48.5 million, which was down 15% from the same period of 2022. Gross merchandise value (GMV) fell at a steeper rate, declining at a 25% clip to $202 million. At least the retailer managed to mop up some of the red ink; its comprehensive net loss was $38.1 million against the nearly $71 million shortfall in the year-ago quarter.
In its earnings release, Jumia placed the blame for its declines on the broader macroeconomy. It quoted CEO Francis Dufay as saying that "Usage performance continued to be affected by the difficult operating environment with record levels of inflation impacting consumers' spend as well as sellers' ability to source goods."
Jumia plans to face this challenge by making "fundamental enhancements" to its online platform. It aims to improve its supply and its pricing while becoming a more convenient option for the site's users and merchants.
Now what
Jumia also said it would aim to continue reducing losses by saving costs. Putting its money where its mouth is, the company raised its guidance for full-year 2023, non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA). It now believes its adjusted EBITDA loss will come in at $90 million to $100 million. Previously, it was guiding for a deficit of $100 million to $120 million.
