Vipshop Rises 7% on Q3 Earnings and Revenue Beat

Gains continue for the e-commerce firm, as investors shy away from Chinese tech giants his week.
Anthony RussoNov 13,2020,15:15

The stock in Vipshop Holdings (NYSE: VIPS) soared 7% to $23.67 per American depositary share in early trading Friday on posting better-than-anticipated financial results for the third quarter.

The Guangzhou-based online retailer said in a statement today that its revenues for the three months ending September came in at $3.4 billion, up 18% year-over-year on adjusted earnings of 30 cents per share. Wall Street was looking for revenues of $3.27 billion on adjusted earnings of 26 cents per share.

Vipshop attributed the growth to the number of active customers, which hit 43.4 million, representing a 36% increase from the same period of the preceding year. Its gross merchandise volume for the period reached 38.3 billion yuan ($5.64 billion) versus 31.7 billion yuan ($4.67 billion) in 2019.

“We are glad that customers recognize the value of our differentiated offerings, particularly in our core apparel-related categories,” Eric Shen, the chairman, and the chief executive officer said in a statement today.

He added, “We are confident the positive trends in customer acquisition and retention will continue to drive our growth and profitability going forward. Looking ahead, we remain focused on providing value to our customers, offering superior customer experience and carefully procured assortments at a deep discount, further enabling us to gain share in China's discount retail market."

As stocks in large Chinese tech giants including Alibaba (NYSE: BABA; HKEX: 09988) and JD.com, (HKEX: 09618; Nasdaq: JD) have fallen this week on Beijing unveiling draft rules that aim to crack down on companies that use monopoly practices, investors have turned to Vipshop’s shares. Since Monday’s close, shares of Vipshop have leaped 14% to date.

Although most stocks in Chinese tech giants have been recovering, Alibaba remains down significantly.

However, if you are looking for a buying opportunity now—it won’t be cheap. The stock currently trades around 49 times earnings.

In the fourth quarter, Vipshop expects revenue to come in the range of $5.1 billion to $5.33 billion, which would represent year-over-year growth between roughly 15% and 20%.

Overall, shares of Vipshop have risen 66% this year.

Topics:Vipshop, JD.com, Alibaba.
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