Vipshop Holdings ( VIPS Quick Quote VIPS - Free Report) reported second-quarter 2020 adjusted earnings of 27 cents per American depositary share, missing the Zacks Consensus Estimate by 3.6%. Moreover, revenues of $3.4 billion missed the consensus mark by 0.2%. In domestic currency (RMB), earnings jumped 85.1% year over year to RMB2.24 per ADS. Additionally, revenues increased 6% on a year-over-year basis to RMB24.11 billion. Quarter Details
Gross Merchandise Value (“GMV”) increased 9% year over year to RMB38.4 billion. Notably, GMV contribution from apparel-related categories increased to 69% from 63% in the year-ago quarter. GMV contribution from Vipshop’s Fengqiang and Kuaiqiang channels reached 50% of the company’s online GMV.
Moreover, total orders increased 15% year over year to 170.5 million. Additionally, the number of active customers increased 17% year over year to 38.8 million.
Vipshop witnessed strong recovery in apparel demand beginning May. The company ran a promotional campaign in June that helped it attract new customers.
Markedly, conversion rate for Vipshop’s app increased 10% year over year. Moreover, repeat customers as a percentage of total active customers increased to 90% from 87% in the year-ago quarter. Gross profit declined 2.9% year over year to RMB4.94 billion in second-quarter 2020. Gross margin contracted 210 basis points (bps) to 20.5%, primarily attributable to the company’s strategy to reinvest into discounts and coupons during this year’s June promotional event. Fulfillment expenses declined 23.8% year over year to RMB1.68 billion. Further, general and administrative expenses increased 13.9% to RMB804.6 million. However, marketing expenses increased 17.2% year over year to RMB1.03 billion. Moreover, technology and content expenses fell 27.7% to $144.5 million. Operating income increased 27.1% year over year to RMB1.50 billion in the quarter under review. Balance Sheet & Cash Flow
As of Jun 30, 2020, the company had cash and cash equivalents of RMB7.40 billion. Net cash from operating activities was RMB5.1 billion.
Vipshop announced that CFO Donghao Yang, will step down from his current position in November.
For third quarter of 2020, Vipshop expects revenues between RMB20.6 billion and RMB21.6 billion, representing a year-over-year growth rate of approximately 5-10%.
Zacks Rank & Stocks to Consider
Vipshop currently carries a Zacks Rank #3 (Hold). Autodesk (
ADSK Quick Quote ADSK - Free Report) , Autohome ( ATHM Quick Quote ATHM - Free Report) and salesforce.com ( CRM Quick Quote CRM - Free Report) are some better-ranked stocks in the broader computer and technology sector. Currently, all the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Autodesk, Autohome and salesforce.com are set to report their quarterly results on Aug 25. Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time. See 8 breakthrough stocks now>>