Jumia reports Q2 earnings, operating loss down 44% from last year

Yahoo Finance's Ines Ferre joins The First Trade to break down one of Yahoo Finance's top trending tickers on Wednesday, Jumia. The e-commerce company posted its second quarter earnings report Wednesday morning.

Video Transcript

BRIAN SOZZI: Let's get back to Ines Ferre for a look at one of the top Trending Tickers on Yahoo Finance, Jumia. Shares of the company are falling after reported second-quarter earnings results this morning. Ines?

INES FERRE: That's right, Brian. Jumia right now down about 27%. This is the e-commerce company which focuses on Africa. Its annual active consumers grew 40% year-over-year. Orders increased 8% year-over-year.

Its adjusted EBITDA loss reached 32.9 million euros. That's a decrease of 26% year-over-year. And this includes a settlement cost that's related to some of those lawsuits brought on last year claiming misstatements and omission in connection with its IPO. You also last year had that Citron Research claim-- those Citron Research claims. That was a settlement of $5 million, $1 million paid by its insurance coverage.

Now you are seeing pressure on the stock. Its Gross Merchandise Volume came in weak. GMV dropped 13%, with the sharpest decline in phone sales. And the company expects Gross Merchandise Volume softness really to continue through 2020. It did say that it saw an increase in demand for essential items and reduced appetite for higher-ticket discretionary items.

It did cut some of its sales and advertising expenses, decreasing that by about 51% year-over-year. And it introduced this network of proximity warehouses. They call it this mother-daughter warehouse system for essential products that would reduce costs, that last-mile delivery cost. And it would also reduce delivery time.

But certainly, right now, significant pressure on the stock, down 27%. And if you just take a look at the max chart, this is-- I remember when this company went public last year in April of last year on the stock exchange, pricing its IPO at $14.50 a share. You can see where it's trading below that right now, Brian.

BRIAN SOZZI: Decline makes sense. Bad quarter-- they've lost a ton of money so far this year. Thanks so much, Ines.