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Vipshop Reports Unaudited Second Quarter 2015 Financial Results
Second Quarter 2015 Highlights
- Total net revenue increased by 77.6% to
RMB9.0 billion (US$1.5 billion ) fromRMB5.1 billion in the prior year period. - Gross profit increased by 78.6% to
RMB2.3 billion (US$363.0 million ) fromRMB1.3 billion in the prior year period. Gross margin increased to 25.0% from 24.8% in the prior year period. - Income from operations increased by 192.5% to
RMB437.8 million (US$70.6 million ) fromRMB149.6 million in the prior year period. Operating margin increased to 4.9% from 2.9% in the prior year period. - Non-GAAP income from operations[1] increased by 113.0% to
RMB568.6 million (US$91.7 million ) fromRMB267.0 million in the prior year period. Non-GAAP operating margin[2] increased to 6.3% from 5.3% in the prior year period. - Net income attributable to
Vipshop's shareholders increased by 147.2% toRMB399.3 million (US$64.4 million ) fromRMB161.5 million in the prior year period. Net income margin attributable toVipshop's shareholders increased to 4.4% from 3.2% in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholders[3] increased by 96.6% toRMB517.6 million (US$83.5 million ) fromRMB263.2 million in the prior year period. Non-GAAP net income margin attributable toVipshop's shareholders[4] increased to 5.7% from 5.2% in the prior year period.
Mr.
Mr.
Second Quarter 2015 Financial Results
REVENUE
Total net revenue for the second quarter of 2015 increased by 77.6% to
The number of active customers[5] for the second quarter of 2015 increased by 47.2% to 14.2 million from 9.7 million in the prior year period. The number of total orders[6] for the second quarter of 2015 increased by 55.2% to 44.9 million from 28.9 million in the prior year period[7].
In an effort to increase focus on its core flash sales business, and attract and maintain high-quality long-term customers, the Company began to substantially scale down its lower-margin group-buy business in the third quarter of 2014. As a result, revenue contribution from the group-buy business decreased to 0.2% of
GROSS PROFIT
Gross profit for the second quarter of 2015 increased by 78.6% to
OPERATING INCOME AND EXPENSES
Total operating expenses for the second quarter of 2015 were
- Fulfillment expenses for the second quarter of 2015 were
RMB819.6 million (US$132.2 million ), as compared withRMB513.4 million in the prior year period, primarily reflecting the increase in sales volume, and number of orders fulfilled. As a percentage of total net revenue, fulfillment expenses decreased to 9.1% from 10.1% in the prior year period, primarily reflecting the scale effect associated with the rapid growth in total net revenue and the increase in average ticket size. - Marketing expenses for the second quarter of 2015 were
RMB502.6 million (US$81.1 million ), as compared withRMB274.2 million in the prior year period. As a percentage of total net revenue, marketing expenses were 5.6%, as compared with 5.4% in the prior year period, reflecting the Company's strategy to drive long-term growth through increasing investments in strengthening its brand awareness, attracting new users particularly for its mobile application, and expanding market share especially within product categories such as cosmetics, home goods, and baby and child care products. - Technology and content expenses for the second quarter of 2015 were
RMB245.7 million (US$39.6 million ), as compared withRMB131.0 million in the prior year period. As a percentage of total net revenue, technology and content expenses were 2.7%, as compared with 2.6% in the prior year period, primarily reflecting the Company's continued effort to expand headcount to better support future growth, as well as its investments in data analytics, which can help improve the ability to predict consumer behavior and further enhance user experience. - General and administrative expenses for the second quarter of 2015 were
RMB286.7 million (US$46.2 million ), as compared withRMB225.9 million in the prior year period. As a percentage of total net revenue, general and administrative expenses decreased to 3.2% from 4.4% in the prior year period, primarily reflecting the scale effect associated with the rapid growth in total net revenue.
Income from operations for the second quarter of 2015 increased by 192.5% to
Non-GAAP income from operations, which excludes share-based compensation expenses and amortization of intangible assets resulting from a business acquisition, increased by 113.0% to
NET INCOME
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
As of
For the quarter ended
Business Outlook
For the third quarter of 2015, the Company expects its total net revenue to be between
Exchange Rate
This announcement contains currency conversions of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of
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: |
400-1200654 |
Hong Kong: |
+852-3018-6776 |
Conference ID: |
#97698899 |
The replay will be accessible through
United States Toll Free: |
+1-855-452-5696 |
International: |
+61 2 90034211 |
Conference ID: |
#97698899 |
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 unaudited condensed consolidated financial information is 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] |
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 a business acquisition. |
[2] |
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. |
[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 share-based compensation expenses and amortization of intangible assets resulting from a business acquisition and equity method investments. |
[4] |
Non-GAAP net income 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. |
[5] |
Beginning in the first quarter of 2015, the Company has updated its definition of "active customers" from "registered members who have purchased products from the Company at least once during the relevant period" to "registered members who have purchased from the Company or the Company's online marketplace platforms at least once during the relevant period." The active customer figures in 2014 and 2015 include active Lefeng customers after the Lefeng acquisition was completed in February 2014. |
[6] |
Beginning in the first quarter of 2015, the Company has updated its definition of "total orders" from "the total number of orders placed during the relevant period" to "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." The total order figures in 2014 and 2015 include orders attributable to Lefeng after the Lefeng acquisition was completed in February 2014. |
[7] |
The prior year period figures of active customers, total orders and repeat customers in this release have also been revised to reflect the broadened definitions to ensure comparability. |
[8] |
"ADS" means American Depositary Share. Effective November 3, 2014, the Company changed its ADS to Class A Ordinary Share ("Share") ratio from one ADS representing two ordinary shares to five ADSs representing one ordinary share. The computation of GAAP and non-GAAP income per diluted ADS have been adjusted retroactively for all periods presented to reflect this change. |
Vipshop Holdings Limited |
|||
Condensed Consolidated Statements of Income and Comprehensive Income |
|||
(In thousands, except per share data) |
|||
Three Months Ended |
|||
June 30,2014 |
June 30,2015 |
June 30,2015 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Product revenues |
5,000,844 |
8,829,714 |
1,424,147 |
Other revenues (1) |
78,042 |
188,408 |
30,388 |
Total net revenues |
5,078,886 |
9,018,122 |
1,454,535 |
Cost of goods sold |
(3,818,868) |
(6,767,452) |
(1,091,525) |
Gross profit |
1,260,019 |
2,250,670 |
363,010 |
Operating expenses |
|||
Fulfillment expenses(2) |
(513,385) |
(819,612) |
(132,194) |
Marketing expenses |
(274,208) |
(502,566) |
(81,059) |
Technology and content expenses |
(131,020) |
(245,695) |
(39,628) |
General and administrative expenses(3) |
(225,910) |
(286,743) |
(46,249) |
Total operating expenses |
(1,144,524) |
(1,854,616) |
(299,130) |
Other income |
34,144 |
41,714 |
6,728 |
Income from operations |
149,639 |
437,768 |
70,608 |
Interest expenses |
(28,679) |
(16,981) |
(2,739) |
Interest income |
82,301 |
75,750 |
12,218 |
Exchange gain |
4,377 |
19,959 |
3,219 |
Income before income taxes and share of loss of affiliates |
207,638 |
516,496 |
83,306 |
Income tax expense(4) |
(57,988) |
(112,603) |
(18,162) |
Share of loss of affiliates |
(11,184) |
(19,922) |
(3,213) |
Net income |
138,466 |
383,971 |
61,931 |
Net loss attributable to noncontrolling interests |
23,079 |
15,320 |
2,471 |
Net income attributable to Vipshop's shareholders |
161,545 |
399,291 |
64,402 |
Shares used in calculating earnings per share(5): |
|||
Class A ordinary shares: |
|||
-- Basic |
96,704,297 |
99,369,295 |
99,369,295 |
-- Diluted |
102,917,277 |
103,690,098 |
103,690,098 |
Class B ordinary shares: |
|||
-- Basic |
16,510,358 |
16,510,358 |
16,510,358 |
-- Diluted |
16,510,358 |
16,510,358 |
16,510,358 |
Net earnings per Class A share |
|||
Net income attributable to Vipshop's shareholders -- Basic |
1.46 |
3.45 |
0.56 |
Net income attributable to Vipshop's shareholders -- Diluted |
1.37 |
3.32 |
0.54 |
Net earnings per Class B share |
|||
Net income attributable to Vipshop's shareholders -- Basic |
1.46 |
3.45 |
0.56 |
Net income attributable to Vipshop's shareholders -- Diluted |
1.37 |
3.32 |
0.54 |
Net earnings per ADS (1 ordinary share equals to 5 ADSs) |
|||
Net income attributable to Vipshop's shareholders -- Basic |
0.29 |
0.69 |
0.11 |
Net income attributable to Vipshop's shareholders -- Diluted |
0.27 |
0.66 |
0.11 |
(1)Other revenues primarily consist of revenues from product promotion and online advertising, fees charged to third-party merchants which the Company provides platform access for sales of their products. |
|||
(2) Including shipping and handling expenses, which amounted RMB 245 million and RMB 301 million in the three month periods ended June 30, 2014 and June 30, 2015, respectively. |
|||
(3)Including amortization of intangible assets resulting from a business acquisition, which amounted to RMB 62 million and RMB 61 million in the three months period ended June 30, 2014 and June 30, 2015, respectively. |
|||
(4)Included income tax benefits of RMB 15 million and RMB 15 million related to the reversal of deferred tax liabilities, which was recognized on the businss acquisition of Lefeng for the three months period ended June 30, 2014 and June 30, 2015, respectively. |
|||
(5) Authorized share capital are re-classified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled to one vote and each Class B ordinary share being entitled to ten votes on all matters that are subject to shareholder vote. |
|||
Net income |
138,466 |
383,971 |
61,931 |
Other comprehensive income, net of tax: |
|||
Foreign currency translation adjustments |
(976) |
(15,797) |
(2,548) |
Unrealized gain or loss of available-for-sales securities |
(918) |
(148) |
|
Comprehensive income |
137,490 |
367,256 |
59,235 |
Less: Comprehensive loss attributable to non-controlling interests |
(23,261) |
(16,273) |
(2,625) |
Comprehensive income attributable to Vipshop's shareholders |
160,751 |
383,529 |
61,860 |
Three Months Ended |
|||
June 30,2014 |
June 30,2015 |
June 30,2015 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Share-based compensation charges included are follows |
|||
Fulfillment expenses |
2,247 |
4,149 |
669 |
Marketing expenses |
4,506 |
4,176 |
674 |
Technology and content expenses |
27,053 |
31,085 |
5,014 |
General and administrative expenses |
22,321 |
30,808 |
4,969 |
Total |
56,127 |
70,218 |
11,326 |
Vipshop Holdings Limited |
|||
Condensed Consolidated Balance Sheets |
|||
(In thousands, except per share data) |
|||
December 31,2014 |
June 30,2015 |
June 30,2015 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
ASSETS |
(Unaudited) |
(Unaudited) |
(Unaudited) |
CURRENT ASSETS |
|||
Cash and cash equivalents |
4,790,751 |
4,430,522 |
714,600 |
Restricted cash |
400 |
9,700 |
1,565 |
Held-to-maturity securities |
3,768,338 |
2,866,146 |
462,282 |
Accounts receivable, net |
155,099 |
419,859 |
67,719 |
Amounts due from related parties |
30,991 |
20,866 |
3,366 |
Other receivables |
550,122 |
645,762 |
104,155 |
Inventories |
3,588,304 |
2,719,500 |
438,628 |
Advance to suppliers |
81,952 |
90,375 |
14,577 |
Prepaid expenses |
21,348 |
35,288 |
5,692 |
Deferred tax assets |
233,149 |
260,365 |
41,994 |
Total current assets |
13,220,454 |
11,498,383 |
1,854,578 |
NON-CURRENT ASSETS |
- |
||
Property and equipment, net |
1,911,453 |
2,570,392 |
414,579 |
Deposits for property and equipment |
207,509 |
232,657 |
37,525 |
Prepaid land use right |
81,991 |
169,283 |
27,303 |
Intangible assets, net |
1,038,949 |
902,776 |
145,609 |
Investment in affiliates |
287,390 |
357,894 |
57,725 |
Other investments |
102,792 |
436,613 |
70,422 |
Available-for-sale securities investment, non-current |
61,821 |
9,971 |
|
Other long-term assets |
40,503 |
104,235 |
16,812 |
Goodwill |
60,000 |
64,819 |
10,455 |
Total non-current assets |
3,730,587 |
4,900,490 |
790,401 |
TOTAL ASSETS |
16,951,041 |
16,398,873 |
2,644,979 |
LIABILTIES AND EQUITY |
|||
CURRENT LIABILITIES |
|||
Accounts payable (Including accounts payable of the VIE without recourse to the Company of RMB 7,490 and RMB 14,942 as of December 31, 2014 and June 30, 2015, respectively) |
6,121,256 |
4,740,239 |
764,555 |
Advance from customers (Including advance from customers of the VIE without recourse to the Company of RMB 1,217,429 and RMB 607,928 as of December 31, 2014 and June 30, 2015, respectively) |
1,422,935 |
1,243,044 |
200,491 |
Accrued expenses and other current liabilities (Including accrued expenses and other current liabilities of the VIE without recourse to the Company of RMB 944,097 and RMB 793,497 as of December 31, 2014 and June 30,2015, respectively) |
2,340,755 |
2,311,201 |
372,774 |
Amounts due to related parties (Including amounts due to related parties of the VIE without recourse to the Company of RMB 2,474 and RMB 33,497 as of December 31, 2014 and June 30, 2015, respectively) |
75,784 |
155,452 |
25,073 |
Deferred income (Including deferred income of the VIE without recourse to the Company of RMB 178,920 and RMB 199,353 as of December 31, 2014 and June 30, 2015, respectively) |
194,560 |
292,684 |
47,207 |
Short term loans (Including short term loans of the VIE without recourse to the Company of nil as of December 31, 2014 and June 30, 2015) |
- |
6,000 |
968 |
Total current liabilities |
10,155,290 |
8,748,620 |
1,411,068 |
NON-CURRENT LIABILITIES |
|||
Deferred tax liability |
242,697 |
212,616 |
34,293 |
Convertible senior notes |
3,854,985 |
3,868,137 |
623,893 |
Total non-current liabilities |
4,097,682 |
4,080,753 |
658,186 |
Total liabilities |
14,252,973 |
12,829,373 |
2,069,254 |
EQUITY: |
|||
Class A ordinary shares (US$0.0001 par value, 483,489,642 shares authorized, and 99,475,664 and 98,028,314 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively) |
63 |
64 |
10 |
Class B ordinary shares (US$0.0001 par value, 16,510,358 shares authorized, and 16,510,358 and 16,510,358 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively) |
11 |
11 |
2 |
Additional paid-in capital |
2,538,217 |
2,679,358 |
432,154 |
Retained earnings |
26,544 |
793,345 |
127,959 |
Accumulated other comprehensive income (loss) |
(10,711) |
(11,555) |
(1,864) |
Non-controlling interests |
143,944 |
108,277 |
17,464 |
Total shareholders' equity |
2,698,068 |
3,569,500 |
575,725 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
16,951,041 |
16,398,873 |
2,644,979 |
Vipshop Holdings Limited |
|||
Reconciliations of GAAP and Non-GAAP Results |
|||
Three Months Ended |
|||
June 30,2014 |
June 30,2015 |
June 30,2015 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Income from operations |
149,639 |
437,768 |
70,608 |
Share-based compensation expenses |
56,127 |
70,218 |
11,326 |
Amortization of intangible assets resulting from a business acquisition |
61,224 |
60,628 |
9,779 |
Non-GAAP income from operations |
266,990 |
568,614 |
91,713 |
Net income |
138,466 |
383,971 |
61,931 |
Share-based compensation expenses |
56,127 |
70,218 |
11,326 |
Amortization of intangible assets resulting from a business acquisition and equity method investments (net of tax) |
57,055 |
59,434 |
9,586 |
Non-GAAP net income |
251,648 |
513,623 |
82,843 |
Net income attributable to Vipshop's shareholders |
161,545 |
399,291 |
64,402 |
Share-based compensation expenses |
56,127 |
70,218 |
11,326 |
Amortization of intangible assets resulting from a business acquisition and equity method investments (exclude non-controlling interests and net of tax) |
45,576 |
48,118 |
7,761 |
Non-GAAP net income attributable to Vipshop's shareholders |
263,248 |
517,627 |
83,489 |
Shares used in calculating earnings per share: |
|||
Basic common shares: |
|||
Class A ordinary shares: |
|||
-- Basic |
96,704,297 |
99,369,295 |
99,369,295 |
-- Diluted |
102,917,277 |
103,690,098 |
103,690,098 |
Class B ordinary shares: |
|||
-- Basic |
16,510,358 |
16,510,358 |
16,510,358 |
-- Diluted |
16,510,358 |
16,510,358 |
16,510,358 |
Non-GAAP net income per Class A share |
|||
Non-GAAP net income attributable to Vipshop's shareholders -- Basic |
2.33 |
4.47 |
0.72 |
Non-GAAP net income attributable to Vipshop's shareholders -- Diluted |
2.20 |
4.31 |
0.69 |
Non-GAAP net income per Class B share |
|||
Non-GAAP net income attributable to Vipshop's shareholders -- Basic |
2.33 |
4.47 |
0.72 |
Non-GAAP net income attributable to Vipshop's shareholders -- Diluted |
2.20 |
4.31 |
0.69 |
Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs) |
|||
Non-GAAP net income attributable to Vipshop's shareholders -- Basic |
0.47 |
0.89 |
0.14 |
Non-GAAP net income attributable to Vipshop's shareholders -- Diluted |
0.44 |
0.86 |
0.14 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/vipshop-reports-unaudited-second-quarter-2015-financial-results-300126046.html
SOURCE
Investor Relations Contact, Millicent Tu, Vipshop Holdings Limited, +86-20-2233-0732, IR@vipshop.com; Jeremy Peruski, ICR, Inc., +1-646-405-4866, IR@vipshop.com