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Vipshop Reports Unaudited Third Quarter 2018 Financial Results
Third Quarter 2018 Highlights
- Total net revenue for the third quarter of 2018 increased by 16.4% year over year to
RMB17.8 billion (US$2.6 billion ) fromRMB15.3 billion in the prior year period. - The number of active customers[1] for the third quarter of 2018 increased by 11% year over year to 26.5 million from 23.8 million in the prior year period.
- Total orders[2] for the third quarter of 2018 increased by 29% year over year to 95.7 million from 74.0 million in the prior year period.
- Gross profit for the third quarter of 2018 increased by 3.8% year over year to
RMB3.6 billion (US$528.7 million ) fromRMB3.5 billion in the prior year period. - Net income attributable to
Vipshop's shareholders for the third quarter of 2018 wasRMB228.7 million (US$33.3 million ), as compared withRMB338.1 million in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholders[3] for the third quarter of 2018 wasRMB500.8 million (US$72.9 million ), as compared withRMB559.8 million in the prior year period.
Mr.
Mr.
Recent Business Highlights
- In the third quarter of 2018,
Vipshop's total active customers grew by 11% year over year. The number of new customers fromTencent andJD.com accounted for approximately 22% ofVipshop's total new customers during the quarter. - In the third quarter of 2018,
Vipshop's average revenue per customer increased by approximately 5% year over year. The Company's customer stickiness continued to improve. Specifically, around 85% of customers during this quarter were repeat customers, and 96% of orders were placed by repeat customers. - As of
September 30, 2018 , approximately 2.3 million customers enrolled inVipshop's Super VIP Paid Membership Program, representing a 21% increase quarter over quarter. - In
September 2018 ,Vipshop's Internet finance subsidiary completed its first offering of asset-backed notes ("ABN") in an aggregate principal amount ofRMB520 million . The Company will continue to seek external sources of funding to support its Internet finance business. - During the third quarter of 2018,
Vipshop added approximately 40,000 square meters of warehousing space. As ofSeptember 30, 2018 , the Company has approximately 2.9 million square meters of total warehousing space, of which around 1.8 million square meters is owned byVipshop .
Third Quarter 2018 Financial Results
REVENUE
Total net revenue for the third quarter of 2018 increased by 16.4% year over year to
GROSS PROFIT
Gross profit for the third quarter of 2018 increased by 3.8% to
OPERATING EXPENSES
Total operating expenses for the third quarter of 2018 were
- Fulfillment expenses for the third quarter of 2018 were
RMB1.8 billion (US$256.7 million ), as compared withRMB1.7 billion in the prior year period, primarily reflecting an increase in sales volume and number of orders fulfilled. As a percentage of total net revenue, fulfillment expenses for the third quarter of 2018 decreased to 9.9% from 10.9% in the prior year period. - Marketing expenses for the third quarter of 2018 were
RMB578.4 million (US$84.2 million ), as compared withRMB478.4 million in the prior year period. As a percentage of total net revenue, marketing expenses for the third quarter of 2018 were 3.2%, as compared with 3.1% in the prior year period. - Technology and content expenses for the third quarter of 2018 were
RMB490.8 million (US$71.5 million ), as compared withRMB455.0 million in the prior year period. As a percentage of total net revenue, technology and content expenses for the third quarter of 2018 decreased to 2.8% from 3.0% in the prior year period. - General and administrative expenses for the third quarter of 2018 were
RMB624.8 million (US$91.0 million ), as compared withRMB546.6 million in the prior year period. As a percentage of total net revenue, general and administrative expenses for the third quarter of 2018 decreased to 3.5% from 3.6% in the prior year period.
INCOME FROM OPERATIONS
Income from operations for the third quarter of 2018 was
Non-GAAP income from operations[4] for the third quarter of 2018, which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, was
NET INCOME
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
BALANCE SHEET AND CASH FLOW
As of
For the quarter ended
For the three months ended |
||||
Sep 30, 2017
RMB'000 |
Sep 30, 2018
RMB'000 |
Sep 30, 2018
US$'000 |
||
Net cash (used in)/from operating activities |
(359,678) |
221,037 |
32,184 |
|
Add: Impact from Internet financing activities[10] |
503,416 |
(427,526) |
(62,249) |
|
Less: Capital expenditures |
(719,081) |
(1,009,475) |
(146,982) |
|
Free cash flow out |
(575,343) |
(1,215,964) |
(177,047) |
For the trailing twelve months ended |
||||
Sep 30, 2017
RMB'000 |
Sep 30, 2018
RMB'000 |
Sep 30, 2018
US$'000 |
||
Net cash from operating activities |
904,849 |
767,985 |
111,821 |
|
Add: Impact from Internet financing activities[10] |
2,903,516 |
1,059,238 |
154,228 |
|
Less: Capital expenditures |
(2,690,145) |
(3,191,761) |
(464,729) |
|
Free cash flow in/(out) |
1,118,220 |
(1,364,538) |
(198,680) |
Business Outlook
For the fourth quarter of 2018, the Company expects its total net revenue to be between
Exchange Rate
The Company's business is primarily conducted in
Conference Call Information
The Company will hold a conference call on
United States: |
+1-845-675-0438 |
International Toll Free: |
+1-855-500-8701 |
China Domestic: |
400-1200-654 |
Hong Kong: |
+852-3018-6776 |
Conference ID: |
#9978308 |
The replay will be accessible through
United States Toll Free: |
+1-855-452-5696 |
International: |
+61-2-9003-4211 |
Conference ID: |
#9978308 |
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.vip.com.
About
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as
Use of Non-GAAP Financial Measures
The condensed consolidated financial information is derived from the Company's unaudited interim condensed consolidated financial statements prepared in conformity with accounting principles generally accepted in
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Vipshop Holdings Limited Reconciliations of GAAP and Non-GAAP Results" at the end of this release.
[1] "Active customers" is defined as registered members who have purchased from the Company or the Company's online marketplace platforms at least once during the relevant period. |
[2] "Total orders" is defined as the total number of orders placed during the relevant period, including the orders for products and services sold in the Company's online sales business and on the Company's online marketplace platforms, net of orders returned. |
[3] Non-GAAP net income attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as net income attributable to Vipshop's shareholders excluding (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) amortization of intangible assets resulting from business acquisitions and equity method investments, (iv) tax effect of amortization of intangible assets resulting from business acquisitions, (v) gain on disposal, revaluation and value changes of investments, and (vi) share of result in investment of limited partnership that is accounted for as an equity method investee. |
[4] Non-GAAP income from operations is a non-GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. |
[5] Non-GAAP operating income margin is a non-GAAP financial measure, which is defined as non-GAAP income from operations as a percentage of total net revenues. |
[6] "ADS" means American depositary share, each of which represents 0.2 Class A ordinary share. |
[7] Non-GAAP net margin attributable to Vipshop's shareholders is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop's shareholders, as a percentage of total net revenues. |
[8] Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to Vipshop's shareholders |
[9] Free cash flow is a non-GAAP financial measure, which is defined as net cash from operating activities adding back the impact from Internet financing activities and less capital expenditures, which include purchase of property and equipment, purchase and deposits of land use rights, and purchase of other assets. |
[10] Impact from Internet financing activities represents net cash flow relating to the Company's financial products, which are primarily consumer financing, supplier financing and cooperative lending that the Company provides to customers, suppliers and individuals. |
Vipshop Holdings Limited |
|||
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income |
|||
(In thousands, except for share and per share data) |
|||
Three Months Ended |
|||
September 30,2017 |
September 30,2018 |
September 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Product revenues |
14,900,789 |
17,028,266 |
2,479,363 |
Other revenues (1) |
412,368 |
803,318 |
116,965 |
Total net revenues |
15,313,157 |
17,831,584 |
2,596,328 |
Cost of revenues |
(11,813,674) |
(14,200,146) |
(2,067,581) |
Gross profit |
3,499,483 |
3,631,438 |
528,747 |
Operating expenses: |
|||
Fulfillment expenses (2) |
(1,674,261) |
(1,762,849) |
(256,676) |
Marketing expenses |
(478,424) |
(578,446) |
(84,223) |
Technology and content expenses |
(455,039) |
(490,775) |
(71,458) |
General and administrative expenses (3) |
(546,575) |
(624,759) |
(90,967) |
Total operating expenses |
(3,154,299) |
(3,456,829) |
(503,324) |
Other operating income |
103,017 |
180,097 |
26,223 |
Income from operations |
448,201 |
354,706 |
51,646 |
Gain on disposal or revaluation of investments |
0 |
(89,341) |
(13,008) |
Interest expense |
(18,675) |
(53,784) |
(7,831) |
Interest income |
18,549 |
49,660 |
7,231 |
Foreign exchange (loss) gain |
(26,950) |
57,175 |
8,325 |
Income before income taxes and share of result of equity method investees |
421,125 |
318,416 |
46,363 |
Income tax expenses (4) |
(101,676) |
(102,800) |
(14,968) |
Share of result of equity method investees |
(993) |
10,491 |
1,528 |
Net income |
318,456 |
226,107 |
32,923 |
Net loss attributable to noncontrolling interests |
19,599 |
2,641 |
385 |
Net income attributable to Vipshop's shareholders |
338,055 |
228,748 |
33,308 |
Shares used in calculating earnings per share (5): |
|||
Class A and Class B ordinary shares: |
|||
—Basic |
117,641,548 |
132,508,059 |
132,508,059 |
—Diluted |
125,535,694 |
133,710,240 |
133,710,240 |
Net earnings per Class A and Class B share |
|||
Net income attributable to Vipshop's shareholders——Basic |
2.87 |
1.73 |
0.25 |
Net income attributable to Vipshop's shareholders——Diluted |
2.79 |
1.71 |
0.25 |
Net earnings per ADS (1 ordinary share equals to 5 ADSs) |
|||
Net income attributable to Vipshop's shareholders——Basic |
0.57 |
0.35 |
0.05 |
Net income attributable to Vipshop's shareholders——Diluted |
0.56 |
0.34 |
0.05 |
(1) Other revenues primarily consist of revenues from third-party logistics services, product |
|||
(2) Fulfillment expenses include shipping and handling expenses, which amounted RMB 948 |
|||
(3) General and administrative expenses include amortization of intangible assets resulting |
|||
(4) Income tax expenses include income tax benefits of RMB 21 million and RMB 0.2 million |
|||
(5) Authorized share capital is re-classified and re-designated into Class A ordinary shares and |
|||
Net income |
318,456 |
226,107 |
32,923 |
Other comprehensive income, net of tax: |
|||
Foreign currency translation adjustments |
92,229 |
19,291 |
2,809 |
Unrealized gain from available-for-sale investments |
(1,993) |
0 |
0 |
Comprehensive income |
408,692 |
245,398 |
35,732 |
Less: Comprehensive loss attributable to noncontrolling interests |
(19,599) |
(9,770) |
(1,423) |
Comprehensive income attributable to Vipshop's shareholders |
428,291 |
255,168 |
37,155 |
Three Months Ended |
|||
September 30,2017 |
September 30,2018 |
September 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Share-based compensation expenses included are as follows |
|||
Fulfillment expenses |
17,842 |
21,085 |
3,070 |
Marketing expenses |
9,415 |
11,839 |
1,724 |
Technology and content expenses |
51,420 |
61,447 |
8,947 |
General and administrative expenses |
92,148 |
97,542 |
14,202 |
Total |
170,825 |
191,913 |
27,943 |
Vipshop Holdings Limited |
|||
Unaudited Condensed Consolidated Balance Sheets |
|||
(In thousands, except for share and per share data) |
|||
December 31,2017 |
September 30,2018 |
September 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
ASSETS |
|||
CURRENT ASSETS |
|||
Cash and cash equivalents |
9,973,891 |
6,179,874 |
899,807 |
Restricted cash |
248,101 |
354,045 |
51,550 |
Short term investments |
245,981 |
1,901,968 |
276,932 |
Accounts receivable, net |
4,803,527 |
4,327,326 |
630,071 |
Amounts due from related parties |
10,191 |
13,897 |
2,023 |
Other receivables and prepayments, net |
3,674,196 |
3,730,176 |
543,124 |
Loan Receivables, net |
0 |
309,248 |
45,027 |
Inventories |
6,960,251 |
4,283,470 |
623,685 |
Total current assets |
25,916,138 |
21,100,004 |
3,072,219 |
NON-CURRENT ASSETS |
|||
Property and equipment, net |
6,660,825 |
7,665,441 |
1,116,110 |
Deposits for property and equipment |
307,859 |
347,188 |
50,552 |
Land use rights, net |
3,077,770 |
3,760,913 |
547,599 |
Intangible assets, net |
400,994 |
354,044 |
51,550 |
Investment in equity method investees |
66,334 |
443,340 |
64,551 |
Other investments |
387,640 |
1,025,824 |
149,363 |
Available-for-sale investments |
146,282 |
414,687 |
60,380 |
Other long-term assets |
366,760 |
299,876 |
43,663 |
Goodwill |
367,106 |
367,106 |
53,452 |
Deferred tax assets |
285,112 |
381,159 |
55,498 |
Total non-current assets |
12,066,682 |
15,059,578 |
2,192,718 |
TOTAL ASSETS |
37,982,820 |
36,159,582 |
5,264,937 |
LIABILTIES AND EQUITY |
|||
CURRENT LIABILITIES |
|||
Short term loans (Including short term loans of the VIE without recourse to |
907,310 |
1,722,925 |
250,863 |
Accounts payable (Including accounts payable of the VIE without recourse |
11,445,109 |
6,930,109 |
1,009,043 |
Advance from customers (Including advance from customers of the VIE |
2,339,914 |
1,317,271 |
191,798 |
Accrued expenses and other current liabilities (Including accrued |
3,537,151 |
3,240,951 |
471,892 |
Amounts due to related parties (Including amounts due to related parties |
65,022 |
82,953 |
12,078 |
Deferred income (Including deferred income of the VIE without recourse to |
203,179 |
280,265 |
40,807 |
Securitization debt (Including securitization debt of the VIE without |
760,000 |
950,000 |
138,322 |
Convertible senior notes |
0 |
4,322,548 |
629,375 |
Total current liabilities |
19,257,685 |
18,847,022 |
2,744,178 |
NON-CURRENT LIABILITIES |
|||
Deferred tax liability (Including deferred tax of the VIE without recourse to |
17,007 |
5,111 |
744 |
Deferred income-non current (Including deferred income-non current of |
362,649 |
379,725 |
55,289 |
Securitization debt (Including securitization debt of the VIE without |
0 |
494,000 |
71,928 |
Convertible senior notes |
4,094,903 |
0 |
0 |
Total non-current liabilities |
4,474,559 |
878,836 |
127,961 |
TOTAL LIABILITIES |
23,732,244 |
19,725,858 |
2,872,139 |
EQUITY: |
|||
Class A ordinary shares (US$0.0001 par value, 483,489,642 shares |
74 |
75 |
11 |
Class B ordinary shares (US$0.0001 par value, 16,510,358 shares |
11 |
11 |
2 |
Additional paid-in capital |
8,715,995 |
9,276,339 |
1,350,661 |
Retained earnings |
5,602,681 |
7,219,523 |
1,051,183 |
Accumulated other comprehensive loss |
(24,242) |
(11,344) |
(1,651) |
Noncontrolling interests |
(43,943) |
(50,880) |
(7,408) |
Total shareholders' equity |
14,250,576 |
16,433,724 |
2,392,798 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
37,982,820 |
36,159,582 |
5,264,937 |
Vipshop Holdings Limited |
|||
Reconciliations of GAAP and Non-GAAP Results |
|||
Three Months Ended |
|||
September 30,2017 |
September 30,2018 |
September 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Income from operations |
448,201 |
354,706 |
51,646 |
Share-based compensation expenses |
170,825 |
191,913 |
27,943 |
Amortization of intangible assets resulting from business acquisitions |
84,161 |
607 |
88 |
Non-GAAP income from operations |
703,187 |
547,226 |
79,677 |
Net income |
318,456 |
226,107 |
32,923 |
Share-based compensation expenses |
170,825 |
191,913 |
27,943 |
Gain on disposal, revaluation and value changes of investments |
0 |
89,341 |
13,008 |
Share of result in investment of limited partnership that is accounted for |
0 |
(9,684) |
(1,410) |
Amortization of intangible assets resulting from business acquisitions |
84,161 |
607 |
88 |
Tax effect of amortization of intangible assets resulting from business |
(21,040) |
(152) |
(22) |
Non-GAAP net income |
552,402 |
498,132 |
72,530 |
Net income attributable to Vipshop's shareholders |
338,055 |
228,748 |
33,308 |
Share-based compensation expenses |
170,825 |
191,913 |
27,943 |
Gain on disposal, revaluation and value changes of investments |
0 |
89,341 |
13,008 |
Share of result in investment of limited partnership that is accounted for |
0 |
(9,684) |
(1,410) |
Amortization of intangible assets resulting from business acquisitions |
67,857 |
597 |
87 |
Tax effect of amortization of intangible assets resulting from business |
(16,965) |
(149) |
(22) |
Non-GAAP net income attributable to Vipshop's shareholders |
559,772 |
500,766 |
72,914 |
Shares used in calculating earnings per share: |
|||
Basic ordinary shares: |
|||
Class A and Class B ordinary shares: |
|||
—Basic |
117,641,548 |
132,508,059 |
132,508,059 |
—Diluted |
125,535,694 |
133,710,240 |
133,710,240 |
Non-GAAP net income per Class A and Class B share |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
4.76 |
3.78 |
0.55 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
4.56 |
3.75 |
0.55 |
Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs) |
|||
Non-GAAP net income attributable to Vipshop's shareholders——Basic |
0.95 |
0.76 |
0.11 |
Non-GAAP net income attributable to Vipshop's shareholders——Diluted |
0.91 |
0.75 |
0.11 |
View original content:http://www.prnewswire.com/news-releases/vipshop-reports-unaudited-third-quarter-2018-financial-results-300750182.html
SOURCE
Investor Relations Contact, Jessie Fan, Tel: +86 (20) 2233-0732, Email: IR@vipshop.com