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Vipshop Reports Unaudited Third Quarter 2016 Financial Results
Third Quarter 2016 Highlights
- Total net revenue increased by 38.4% to
RMB12.00 billion (US$1.80 billion ), primarily attributable to a 43% year-over-year increase in the number of active customers[1] to 20.8 million and a 34% year-over-year increase in total orders[2] to 60.1 million. - Gross profit increased by 36.0% to
RMB2.93 billion (US$439.7 million ) fromRMB2.16 billion in the prior year period. - Income from operations increased by 21.3% to
RMB528.8 million (US$79.3 million ) fromRMB436.1 million in the prior year period. Operating margin was 4.4% as compared with 5.0% in the prior year period. - Non-GAAP income from operations[3] increased by 24.8% to
RMB732.0 million (US$109.8 million ) fromRMB586.8 million in the prior year period. Non-GAAP operating margin[4] was 6.1% as compared with 6.8% in the prior year period. - Net income attributable to
Vipshop's shareholders increased by 8.3% toRMB342.9 million (US$51.4 million ) fromRMB316.7 million in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholder[5] increased by 31.5% toRMB595.5 million (US$89.3 million ) fromRMB452.7 million in the prior year period.
"We are pleased to have delivered solid financial results and healthy customer growth despite a seasonally soft quarter for retail," said Mr.
Mr.
Third Quarter 2016 Financial Results
REVENUE
Total net revenue for the third quarter of 2016 increased by 38.4% to
The number of active customers for the third quarter of 2016 increased by 43% to 20.8 million from 14.6 million in the prior year period. The number of total orders for the third quarter of 2016 increased by 34% to 60.1 million from 44.8 million in the prior year period.
GROSS PROFIT
Gross profit for the third quarter of 2016 increased by 36.0% to
OPERATING INCOME AND EXPENSES
Total operating expenses for the third quarter of 2016 were
- Fulfillment expenses for the third quarter of 2016 were
RMB1.03 billion (US$153.8 million ), as compared withRMB778.1 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 8.5% from 9.0% in the prior year period, primarily reflecting the scale effect associated with the growth in total net revenue and improved fulfillment efficiency. - Marketing expenses for the third quarter of 2016 were
RMB641.5 million (US$96.2 million ), as compared withRMB469.6 million in the prior year period, reflecting the Company's strategy to drive long-term growth through sustainable investments to strengthen its brand awareness, attract new users and expand market share. As a percentage of total net revenue, marketing expenses decreased to 5.3% from 5.4% in the prior year period. - Technology and content expenses for the third quarter of 2016 were
RMB374.5 million (US$56.2 million ), as compared withRMB253.1 million in the prior year period, reflecting the Company's continued efforts to invest in human capital, advanced technologies such as data analytics as well as new business opportunities including the Internet finance unit. As a percentage of total net revenue, technology and content expenses were 3.1% as compared with 2.9% in the prior year period. - General and administrative expenses for the third quarter of 2016 were
RMB500.6 million (US$75.1 million ), as compared withRMB296.6 million in the prior year period, primarily due to the build-out of the Internet finance team. As a percentage of total net revenue, general and administrative expenses were 4.2% as compared with 3.4% in the prior year period.
Income from operations for the third quarter of 2016 increased by 21.3% to
Non-GAAP income from operations, which excludes share-based compensation expenses and amortization of intangible assets resulting from a business acquisition, increased by 24.8% to
NET INCOME
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
BALANCE SHEET AND CASH FLOW
As of
For the quarter ended
For the three months ended | |||||
Sep 30, 2015 RMB'000 | Sep 30, 2016 RMB'000 | Sep 30, 2016 US$'000 | |||
Net cash from operating activities | 284,918 | 649,556 | 97,407 | ||
Add: Impact from Internet financing activities[9] | 65,417 | 450,106 | 67,497 | ||
Less: Capital expenditures | (1,567,414) | (830,470) | (124,536) | ||
Free cash flow (out) /in | (1,217,079) | 269,192 | 40,368 |
Business Outlook
For the fourth quarter of 2016, 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: | 400-1200-654 |
Hong Kong: | +852-3018-6776 |
Conference ID: | #11654609 |
The replay will be accessible through
United States Toll Free: | +1-855-452-5696 |
International: | +61-2-9003-4211 |
Conference ID: | #11654609 |
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] | "Active customers" are 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" are 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 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. |
[4] | Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP income from operations as a percentage of total net revenues. |
[5] | Non-GAAP net income attributable to Vipshop's shareholders is a non-GAAP financial measure. Effective from the fourth quarter of 2015, the non-GAAP net income attributable to Vipshop's shareholders is defined as net income attributable to Vipshop's shareholders excluding share-based compensation expenses, impairment loss of investments, and amortization of intangible assets resulting from a business acquisition and equity method investments. |
[6] | A "repeat customer" for a given period refers to any customer who (i) is an active customer during such period, and (ii) had purchased products from us at least twice during the period from our inception on August 22, 2008 to the end of such period. |
[7] | "ADS" means American depositary share, each of which represents 0.2 Class A ordinary share. |
[8] | As used in this press release, free cash flow is defined as operating cash flow 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. |
[9] | Impact from Internet financing activities added back to free cash flow contains changes in the balances of financial products, which are primarily "Weipin Spend" and "Wei Yidai" that the Company provides to customers and suppliers respectively. |
Vipshop Holdings Limited | |||
Condensed Consolidated Statements of Income and Comprehensive Income | |||
(In thousands, except per share data) | |||
Three Months Ended | |||
September 30, 2015 | September 30, 2016 | September 30, 2016 | |
RMB'000 | RMB'000 | USD'000 | |
(Unaudited) | (Unaudited) | (Unaudited) | |
Product revenues | 8,508,687 | 11,703,511 | 1,755,044 |
Other revenues (1) | 162,558 | 298,813 | 44,810 |
Total net revenues | 8,671,245 | 12,002,324 | 1,799,854 |
Cost of goods sold | (6,514,921) | (9,070,361) | (1,360,180) |
Gross profit | 2,156,324 | 2,931,963 | 439,674 |
Operating expenses | |||
Fulfillment expenses(2) | (778,099) | (1,025,845) | (153,834) |
Marketing expenses | (469,615) | (641,514) | (96,201) |
Technology and content expenses | (253,075) | (374,468) | (56,155) |
General and administrative expenses(3) | (296,630) | (500,600) | (75,069) |
Total operating expenses | (1,797,419) | (2,542,427) | (381,259) |
Other income | 77,156 | 139,251 | 20,882 |
Income from operations | 436,061 | 528,787 | 79,297 |
Impairment loss of investments | 0 | (65,940) | (9,888) |
Interest expenses | (22,499) | (20,125) | (3,018) |
Interest income | 62,819 | 21,972 | 3,295 |
Exchange (loss) gain | (56,886) | 31,913 | 4,786 |
Income before income taxes and share of loss of affiliates | 419,495 | 496,607 | 74,472 |
Income tax expense(4) | (93,204) | (135,651) | (20,342) |
Share of loss of affiliates | (33,438) | (15,752) | (2,362) |
Net income | 292,853 | 345,204 | 51,768 |
Net loss (income) attributable to noncontrolling interests | 23,845 | (2,343) | (351) |
Net income attributable to Vipshop's shareholders | 316,698 | 342,861 | 51,417 |
Shares used in calculating earnings per share(5): | |||
Class A and Class B ordinary shares: | |||
--Basic | 116,175,626 | 116,178,808 | 116,178,808 |
--Diluted | 119,869,265 | 118,727,676 | 118,727,676 |
Net earnings per Class A and Class B share | |||
Net income attributable to Vipshop's shareholders -- Basic | 2.73 | 2.95 | 0.44 |
Net income attributable to Vipshop's shareholders -- Diluted | 2.64 | 2.89 | 0.43 |
Net earnings per ADS (1 ordinary share equals to 5 ADSs) | |||
Net income attributable to Vipshop's shareholders | 0.55 | 0.59 | 0.09 |
Net income attributable to Vipshop's shareholders | 0.53 | 0.58 | 0.09 |
(1) Other revenues primarily consist of revenues from third-party logistics services, | |||
(2) Including shipping and handling expenses, which amounted RMB 361 million and | |||
(3) Including amortization of intangible assets resulting from a business acquisition, | |||
(4) Included income tax benefits of RMB 19 million and RMB 20 million related to the | |||
(5) Authorized share capital are re-classified and re-designated into Class A ordinary | |||
Net income | 292,853 | 345,204 | 51,768 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (37,371) | (36,623) | (5,492) |
Unrealized (loss) gain from available for sale securities | (15,419) | 11,342 | 1,701 |
Comprehensive income | 240,063 | 319,923 | 47,977 |
Less: Comprehensive (loss) income attributable to non- | (19,302) | 5,609 | 841 |
Comprehensive income attributable to Vipshop's | 259,365 | 314,314 | 47,136 |
Three Months Ended | |||
September 30, 2015 | September 30, 2016 | September 30, 2016 | |
RMB'000 | RMB'000 | USD'000 | |
(Unaudited) | (Unaudited) | (Unaudited) | |
Share-based compensation charges included are as follows | |||
Fulfillment expenses | 4,496 | 10,136 | 1,520 |
Marketing expenses | 4,346 | 9,536 | 1,430 |
Technology and content expenses | 33,112 | 45,096 | 6,763 |
General and administrative expenses | 34,427 | 61,397 | 9,207 |
Total | 76,381 | 126,165 | 18,920 |
Vipshop Holdings Limited | |||
Condensed Consolidated Balance Sheets | |||
(In thousands, except per share data) | |||
December 31, 2015 | September 30, 2016 | September 30, 2016 | |
RMB'000 | RMB'000 | USD'000 | |
ASSETS | (Unaudited) | (Unaudited) | (Unaudited) |
CURRENT ASSETS | |||
Cash and cash equivalents | 3,324,384 | 4,876,764 | 731,313 |
Restricted cash | - | 62,234 | 9,333 |
Held-to-maturity securities | 1,807,403 | 71,256 | 10,685 |
Accounts receivable, net | 351,423 | 1,602,909 | 240,370 |
Amounts due from related parties | 31,856 | 5,000 | 750 |
Other receivables and prepayments | 1,869,461 | 1,781,252 | 267,114 |
Inventories | 4,566,746 | 3,531,299 | 529,549 |
Deferred tax assets | 202,003 | 344,094 | 51,600 |
Total current assets | 12,153,276 | 12,274,808 | 1,840,714 |
NON-CURRENT ASSETS | |||
Property and equipment, net | 2,949,604 | 4,109,117 | 616,198 |
Deposits for property and equipment | 933,419 | 976,070 | 146,370 |
Land use rights, net | 197,462 | 2,301,631 | 345,150 |
Intangible assets, net | 744,369 | 808,776 | 121,283 |
Investment in affiliates | 252,706 | 101,781 | 15,263 |
Other investments | 489,862 | 482,628 | 72,374 |
Available-for-sale securities investment, non-current | 269,736 | 386,045 | 57,891 |
Other long-term assets | 1,936,307 | 333,532 | 50,016 |
Goodwill | 108,781 | 376,739 | 56,495 |
Total non-current assets | 7,882,246 | 9,876,319 | 1,481,040 |
TOTAL ASSETS | 20,035,522 | 22,151,127 | 3,321,754 |
LIABILTIES AND EQUITY | |||
CURRENT LIABILITIES | |||
Accounts payable (Including accounts payable of the VIE | 6,645,262 | 7,106,509 | 1,065,683 |
Advance from customers (Including advance from | 2,009,578 | 2,124,256 | 318,551 |
Accrued expenses and other current liabilities (Including | 3,104,622 | 3,042,945 | 456,316 |
Amounts due to related parties (Including amounts due to | 206,966 | 33,649 | 5,046 |
Deferred income (Including deferred income of the VIE | 104,531 | 169,419 | 25,406 |
Short term loans (Including short term loans of the VIE | 95,000 | 3,000 | 450 |
Total current liabilities | 12,165,959 | 12,479,778 | 1,871,452 |
NON-CURRENT LIABILITIES | |||
Deferred tax liability (Including deferred tax of the VIE | 175,416 | 116,410 | 17,457 |
Deferred income-non current(Including deferred income-non | 22,699 | 227,040 | 34,047 |
Convertible senior notes | 4,058,181 | 4,203,477 | 630,348 |
Total non-current liabilities | 4,256,296 | 4,546,927 | 681,852 |
Total liabilities | 16,422,255 | 17,026,705 | 2,553,304 |
EQUITY: | |||
Class A ordinary shares (US$0.0001 par value, 483,489,642 | 65 | 66 | 10 |
Class B ordinary shares (US$0.0001 par value, 16,510,358 | 11 | 11 | 2 |
Treasury shares, at cost - 1,614,135 shares as of December | (844,711) | (844,711) | (126,672) |
Additional paid-in capital | 2,838,591 | 3,128,486 | 469,144 |
Retained earnings | 1,616,209 | 2,885,245 | 432,668 |
Accumulated other comprehensive loss | (70,980) | (101,276) | (15,190) |
Non-controlling interests | 74,082 | 56,601 | 8,488 |
Total shareholders' equity | 3,613,267 | 5,124,422 | 768,450 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 20,035,522 | 22,151,127 | 3,321,754 |
Vipshop Holdings Limited | |||
Reconciliations of GAAP and Non-GAAP Results | |||
Three Months Ended | |||
September 30,2015 | September 30,2016 | September 30,2016 | |
RMB'000 | RMB'000 | USD'000 | |
(Unaudited) | (Unaudited) | (Unaudited) | |
Income from operations | 436,061 | 528,787 | 79,297 |
Share-based compensation expenses | 76,381 | 126,165 | 18,920 |
Amortization of intangible assets resulting from a business | 74,309 | 77,093 | 11,561 |
Non-GAAP income from operations | 586,751 | 732,045 | 109,778 |
Net income | 292,853 | 345,204 | 51,768 |
Share-based compensation expenses | 76,381 | 126,165 | 18,920 |
Impairment loss in investments | - | 65,940 | 9,888 |
Amortization of intangible assets resulting from a business | 92,298 | 91,556 | 13,730 |
Tax effect of amortization of intangible assets resulting from | (18,842) | (19,887) | (2,982) |
Non-GAAP net income | 442,690 | 608,978 | 91,324 |
Net income attributable to Vipshop's shareholders | 316,698 | 342,861 | 51,417 |
Share-based compensation expenses | 76,381 | 126,165 | 18,920 |
Impairment loss in investments | - | 65,940 | 9,888 |
Amortization of intangible assets resulting from a business | 73,720 | 76,523 | 11,475 |
Tax effect of amortization of intangible assets resulting from | (14,131) | (16,009) | (2,401) |
Non-GAAP net income attributable to Vipshop's shareholders | 452,668 | 595,480 | 89,299 |
Shares used in calculating earnings per share: | |||
Basic ordinary shares: | |||
Class A and Class B ordinary shares: | |||
--Basic | 116,175,626 | 116,178,808 | 116,178,808 |
--Diluted | 119,869,265 | 118,727,676 | 118,727,676 |
Non-GAAP net income per Class A and Class B share | |||
Non-GAAP net income attributable to Vipshop's shareholders | 3.90 | 5.13 | 0.77 |
Non-GAAP net income attributable to Vipshop's shareholders | 3.78 | 5.02 | 0.75 |
Non-GAAP net income per ADS (1 ordinary share equal to 5 ADSs) | |||
Non-GAAP net income attributable to Vipshop's shareholders | 0.78 | 1.03 | 0.15 |
Non-GAAP net income attributable to Vipshop's shareholders | 0.76 | 1.00 | 0.15 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/vipshop-reports-unaudited-third-quarter-2016-financial-results-300366596.html
SOURCE
Millicent Tu, Vipshop Holdings Limited, +86-20-2233-0732, IR@vipshop.com; Jeremy Peruski, ICR, Inc., +1-646-405-4866, IR@vipshop.com