Vipshop shares tumble 6.8% as Q2 earnings miss estimates, outlook disappoints

GUANGZHOU - Vipshop (NYSE:VIPS ) Holdings Limited (NYSE: VIPS) saw its shares plunge 6.8% after the Chinese online discount retailer reported second quarter earnings that fell short of analyst expectations and provided weaker-than-expected guidance for the third quarter.

The company reported adjusted earnings per American depositary share (ADS) of RMB3.91 ($0.54) for the quarter ended June 30, missing the consensus estimate of RMB3.94. Revenue came in at RMB26.88 billion ($3.7 billion), slightly above the RMB26.82 billion analysts were expecting but down 3.6% YoY.

"Our second quarter results reflected the agility of our team and the resilience of our business model, as we achieved operational excellence in the face of slower sales momentum," said Eric Shen, Chairman and CEO of Vipshop.

Looking ahead, Vipshop forecast third quarter revenue between RMB20.5 billion and RMB21.6 billion, well below the consensus estimate of RMB22.77 billion. The midpoint of the guidance range implies a 10% YoY decline.

The company's active customer base shrank to 44.3 million in Q2 from 45.6 million a year ago. Total orders also fell to 197.8 million from 213.8 million in the prior year period.

Despite the top-line pressure, Vipshop managed to expand its gross margin to 23.6% from 22.2% last year. Operating margin also improved to 8.3% from 6.9%.

"While uncertainties remain in the near term, we believe that our disciplined approach to managing the business, along with the long-term investments we are making in line with our strategy, positions us well to deliver sustainable and profitable growth in the long run," said CFO Mark Wang.

The company repurchased $205.9 million worth of ADSs during the quarter and authorized a new $1 billion share buyback program.

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Source: Investing.com