GUANGZHOU, China - Vipshop (NYSE:VIPS) Holdings Limited (NYSE: VIPS), a prominent online discount retailer for brands in China, reported its first-quarter financial results, which fell short of Wall Street expectations, leading to a 2.6% decline in its stock.
The company posted an adjusted EPS of RMB4.66, surpassing the analyst estimate of RMB4.19. However, revenue for the quarter was RMB27.65 billion, missing the consensus estimate of RMB27.89 billion.
Despite the earnings beat, the company's revenue only saw a marginal increase of 0.4% from the same quarter last year, totaling RMB27.6 billion (US$3.8 billion) compared to RMB27.5 billion in the previous year. The gross profit showed a more robust growth of 10.9% year-over-year (YoY) to RMB6.5 billion (US$906.5 million), with a gross margin increase to 23.7%. The number of active customers slightly decreased to 43.1 million from 43.7 million YoY.
Vipshop's Chairman and CEO, Eric Shen, attributed the slow business momentum to softer-than-expected seasonal demands, while CFO Mark Wang highlighted the company's strong profit growth and healthy margins, driven by higher-margin categories and disciplined operations.
Looking ahead, Vipshop provided second-quarter revenue guidance in the range of RMB26.5-27.9 billion, which is below the analyst consensus of RMB29.3 billion, indicating a potential YoY decrease of up to 5%.
The company's commitment to shareholder returns was evident as it continued its share repurchase program, with approximately US$11.9 million of its ADSs repurchased during the first quarter under the current US$1 billion share repurchase program.
Vipshop's financial stability is supported by cash and cash equivalents, and restricted cash of RMB24.6 billion (US$3.4 billion), along with short-term investments of RMB2.9 billion (US$402.9 million). Despite the challenges faced in the first quarter, management remains confident in the company's unique value proposition and its ability to achieve long-term growth.
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