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Vipshop Reports Unaudited Third Quarter 2017 Financial Results
Third Quarter 2017 Highlights
- Total net revenue for the third quarter of 2017 increased by 27.6% to
RMB15.3 billion (US$2.3 billion ) fromRMB12.0 billion in the prior year period. - The number of active customers[1] for the trailing twelve months ended
September 30, 2017 increased by 22% year over year to 60.5 million from 49.6 million in the prior year period. - Total orders[2] for the third quarter of 2017 increased by 23% year over year to 74.0 million from 60.1 million in the prior year period.
- Gross profit for the third quarter of 2017 increased by 19.4% to
RMB3.5 billion (US$526.0 million ) fromRMB2.9 billion in the prior year period. - Net income attributable to
Vipshop's shareholders for the third quarter of 2017 wasRMB338.1 million (US$50.8 million ), as compared withRMB342.9 million in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholders[3] for the third quarter of 2017 wasRMB559.8 million (US$84.1 million ), as compared withRMB595.5 million in the prior year period.
Mr.
Mr.
Recent Business Highlights
- In the third quarter of 2017,
Vipshop added three local warehouses in Taiyuan,Hohhot , andHefei, China , totaling approximately 32,000 square meters and bringing the Company's total number of local warehouses to fourteen as ofSeptember 30, 2017 . The Company added approximately 23,000 square meters of warehousing space for its cross-border business, including new locations inAustralia ,France , andthe United States . For its regional logistics hubs, approximately 150,000 square meters of warehousing space were added. As ofSeptember 30, 2017 ,Vipshop has approximately 2.4 million square meters of total warehousing space, of which 1.5 million square meters of warehousing space is owned by the Company. - During the third quarter of 2017,
Vipshop delivered 98% of its orders through its proprietary last mile network, up from 90% in the prior year period. Around 72% of customer returns were collected directly byVipshop's last mile staff, which represents a significant increase from 50% in the prior year period. - In the third quarter of 2017, the Company's average revenue per customer increased by 11% year over year, which was primarily driven by the 4% year-over-year increase in average ticket size and 7% year-over-year increase in the number of orders per customer.
Vipshop began to roll out its Super VIP Paid Membership Program to all customers in the third quarter of 2017. The average visiting frequency of customers who enrolled in the program increased by almost 100% after such customers started paying for the membership.Vipshop is connected to the inventory management systems of more than 500 of its suppliers. In the third quarter of 2017, the Company's daily average SKUs online was 3.2 million, representing a significant increase from 1.2 million in the prior year period.Vipshop recently added a number of popular domestic and international brands to its platform, including Diesel,Marc Jacobs ,Sergio Rossi , Shanghai Tang, and Peuterey.- In
October 2017 ,Vipshop's Internet finance subsidiary completed its second offering of Renminbi-denominated asset-backed securities ("ABS") ofRMB500 million , which is listed on theShanghai Stock Exchange inChina . - During the third quarter of 2017,
Vipshop's consumer financing business had 3.8 million users, which was an 146% increase from 1.5 million users in the prior year period.
Third Quarter 2017 Financial Results
REVENUE
Total net revenue for the third quarter of 2017 increased by 27.6% to
The number of active customers for the third quarter of 2017 increased by 15% to 23.8 million from 20.8 million in the prior year period. The number of total orders for the third quarter of 2017 increased by 23% to 74.0 million from 60.1 million in the prior year period.
GROSS PROFIT
Gross profit for the third quarter of 2017 increased by 19.4% to
OPERATING INCOME AND EXPENSES
Total operating expenses for the third quarter of 2017 were
- Fulfillment expenses for the third quarter of 2017 were
RMB1.7 billion (US$251.6 million ), as compared withRMB1.0 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 were 10.9% as compared with 8.5% in the prior year period, primarily attributable to the Company's expansion to support an increase in the last mile business outside of theVipshop platform. - Marketing expenses for the third quarter of 2017 were
RMB478.4 million (US$71.9 million ), as compared withRMB641.5 million in the prior year period. As a percentage of total net revenue, marketing expenses decreased to 3.1% from 5.3% in the prior year period. - Technology and content expenses for the third quarter of 2017 were
RMB455.0 million (US$68.4 million ), as compared withRMB374.5 million in the prior year period, reflecting the Company's continuing efforts to invest in human capital, advanced technologies, and its Internet finance business. As a percentage of total net revenue, technology and content expenses decreased to 3.0% from 3.1% in the prior year period. - General and administrative expenses for the third quarter of 2017 were
RMB546.6 million (US$82.2 million ), as compared withRMB500.6 million in the prior year period. As a percentage of total net revenue, general and administrative expenses decreased to 3.6% from 4.2% in the prior year period, primarily attributable to the Company's improved efficiency due to its greater scale.
Income from operations for the third quarter of 2017 was
Non-GAAP income from operations[4], which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, was
NET INCOME
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
BALANCE SHEET AND CASH FLOW
As of
For the quarter ended
For the three months ended |
||||
Sep 30, 2016
RMB'000 |
Sep 30, 2017
RMB'000 |
Sep 30, 2017
US$'000 |
||
Net cash from (used in) operating activities |
649,556 |
(359,678) |
(54,060) |
|
Add: Impact from Internet financing activities[9] |
450,106 |
503,416 |
75,664 |
|
Less: Capital expenditures |
(830,470) |
(719,081) |
(108,079) |
|
Free cash flow in (out) |
269,192 |
(575,343) |
(86,475) |
Free cash flow trailing twelve months ended
Sep 30, 2016
RMB'000 |
Sep 30, 2017
RMB'000 |
Sep 30, 2017
US$'000 |
||
Net cash from operating activities |
3,634,113 |
904,849 |
136,000 |
|
Add: Impact from Internet financing activities[9] |
1,603,278 |
2,903,516 |
436,402 |
|
Less: Capital expenditures |
(3,844,400) |
(2,690,145) |
(404,332) |
|
Free cash flow in |
1,392,991 |
1,118,220 |
168,070 |
Business Outlook
For the fourth quarter of 2017, 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: |
#3299529 |
The replay will be accessible through
United States Toll Free: |
+1-855-452-5696 |
International: |
+61-2-9003-4211 |
Conference ID: |
#3299529 |
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.
Investor Relations Contact
Tel: +86 (20) 2233-0732
Email: IR@vipshop.com
[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. |
Vipshop Holdings Limited |
|||
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income |
|||
(In thousands, except per share data) |
|||
Three Months Ended |
|||
September 30,2016 |
September 30,2017 |
September 30,2017 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Product revenues |
11,703,511 |
14,900,789 |
2,239,609 |
Other revenues (1) |
298,813 |
412,368 |
61,979 |
Total net revenues |
12,002,324 |
15,313,157 |
2,301,588 |
Cost of revenues |
(9,070,361) |
(11,813,674) |
(1,775,611) |
Gross profit |
2,931,963 |
3,499,483 |
525,977 |
Operating expenses: |
|||
Fulfillment expenses (2) |
(1,025,845) |
(1,674,261) |
(251,644) |
Marketing expenses |
(641,514) |
(478,424) |
(71,908) |
Technology and content expenses |
(374,468) |
(455,039) |
(68,393) |
General and administrative expenses (3) |
(500,600) |
(546,575) |
(82,151) |
Total operating expenses |
(2,542,427) |
(3,154,299) |
(474,096) |
Other income |
139,251 |
103,017 |
15,484 |
Income from operations |
528,787 |
448,201 |
67,365 |
Impairment loss of investments |
(65,940) |
0 |
0 |
Interest expenses |
(20,125) |
(18,675) |
(2,807) |
Interest income |
21,972 |
18,549 |
2,788 |
Exchange gain (loss) |
31,913 |
(26,950) |
(4,051) |
Income before income taxes and share of result of affiliates |
496,607 |
421,125 |
63,295 |
Income tax expense (4) |
(135,651) |
(101,676) |
(15,282) |
Share of loss of affiliates |
(15,752) |
(993) |
(149) |
Net income |
345,204 |
318,456 |
47,864 |
Net (income) loss attributable to noncontrolling interests |
(2,343) |
19,599 |
2,946 |
Net income attributable to Vipshop's shareholders |
342,861 |
338,055 |
50,810 |
Shares used in calculating earnings per share (5): |
|||
Class A and Class B ordinary shares: |
|||
—Basic |
116,178,808 |
117,641,548 |
117,641,548 |
—Diluted |
118,727,676 |
125,535,694 |
125,535,694 |
Net earnings per Class A and Class B share |
|||
Net income attributable to Vipshop's shareholders--Basic |
2.95 |
2.87 |
0.43 |
Net income attributable to Vipshop's shareholders--Diluted |
2.89 |
2.79 |
0.42 |
Net earnings per ADS (1 ordinary share equals to 5 ADSs) |
|||
Net income attributable to Vipshop's shareholders--Basic |
0.59 |
0.57 |
0.09 |
Net income attributable to Vipshop's shareholders--Diluted |
0.58 |
0.56 |
0.08 |
(1) Other revenues primarily consist of revenues from third-party logistics services, product |
|||
(2) Fulfillment expenses include shipping and handling expenses, which amounted RMB 543 |
|||
(3) General and administrative expenses include amortization of intangible assets resulting from |
|||
(4) Income tax expense Includes income tax benefits of RMB 20 million and RMB 21 million related |
|||
(5) Authorized share capital is re-classified and re-designated into Class A ordinary shares and |
|||
Net income |
345,204 |
318,456 |
47,864 |
Other comprehensive income, net of tax: |
|||
Foreign currency translation adjustments |
(36,623) |
92,229 |
13,862 |
Unrealized gain (loss) from available-for-sale securities |
11,342 |
(1,993) |
(299) |
Comprehensive income |
319,923 |
408,692 |
61,427 |
Less: Comprehensive income (loss) attributable to noncontrolling interests |
5,609 |
(19,599) |
(2,946) |
Comprehensive income attributable to Vipshop's shareholders |
314,314 |
428,291 |
64,373 |
Three Months Ended |
|||
September 30,2016 |
September 30,2017 |
September 30,2017 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Share-based compensation expenses included are as follows |
|||
Fulfillment expenses |
10,136 |
17,842 |
2,682 |
Marketing expenses |
9,536 |
9,415 |
1,415 |
Technology and content expenses |
45,096 |
51,420 |
7,728 |
General and administrative expenses |
61,397 |
92,148 |
13,850 |
Total |
126,165 |
170,825 |
25,675 |
Vipshop Holdings Limited |
|||
Unaudited Condensed Consolidated Balance Sheets |
|||
(In thousands, except per share data) |
|||
December 31,2016 |
September 30,2017 |
September 30,2017 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
ASSETS |
|||
CURRENT ASSETS |
|||
Cash and cash equivalents |
4,109,577 |
3,665,310 |
550,901 |
Restricted cash |
0 |
37,781 |
5,679 |
Held-to-maturity securities |
671,776 |
230,267 |
34,610 |
Accounts receivable, net |
2,333,918 |
3,561,913 |
535,360 |
Amounts due from related parties |
8,352 |
5,007 |
753 |
Other receivables and prepayments,net |
2,293,825 |
2,782,842 |
418,265 |
Inventories |
4,948,609 |
4,341,557 |
652,542 |
Deferred tax assets |
214,815 |
0 |
0 |
Total current assets |
14,580,872 |
14,624,677 |
2,198,110 |
NON-CURRENT ASSETS |
|||
Property and equipment, net |
4,467,451 |
6,161,628 |
926,101 |
Deposits for property and equipment |
1,039,793 |
425,639 |
63,974 |
Land use rights, net |
2,399,058 |
3,095,594 |
465,272 |
Intangible assets, net |
725,147 |
484,862 |
72,875 |
Investment in affiliates |
93,144 |
62,642 |
9,415 |
Other investments |
503,117 |
424,096 |
63,742 |
Available-for-sale securities investments |
407,944 |
148,006 |
22,246 |
Other long-term assets |
510,821 |
152,625 |
22,940 |
Goodwill |
367,106 |
367,106 |
55,177 |
Deferred tax assets |
0 |
302,849 |
45,519 |
Total non-current assets |
10,513,581 |
11,625,047 |
1,747,261 |
TOTAL ASSETS |
25,094,453 |
26,249,724 |
3,945,371 |
LIABILTIES AND EQUITY |
|||
CURRENT LIABILITIES |
|||
Short term loans (Including short term loans of the VIE without recourse to |
0 |
554,000 |
83,267 |
Accounts payable (Including accounts payable of the VIE without recourse |
8,333,610 |
8,435,969 |
1,267,937 |
Advance from customers (Including advance from customers of the VIE |
2,699,981 |
1,836,299 |
275,998 |
Accrued expenses and other current liabilities (Including accrued expenses |
3,322,599 |
2,689,541 |
404,242 |
Amounts due to related parties (Including amounts due to related parties of |
52,729 |
13,686 |
2,057 |
Deferred income (Including deferred income of the VIE without recourse to |
174,547 |
173,580 |
26,089 |
Securitization debt (Including securitization debt of the VIE without recourse |
0 |
285,000 |
42,836 |
Total current liabilities |
14,583,466 |
13,988,075 |
2,102,426 |
NON-CURRENT LIABILITIES |
|||
Deferred tax liability (Including deferred tax of the VIE without recourse to the |
100,583 |
38,820 |
5,835 |
Deferred income-non current (Including deferred income-non current of the |
246,902 |
314,814 |
47,317 |
Convertible senior notes |
4,381,698 |
4,187,421 |
629,375 |
Total non-current liabilities |
4,729,183 |
4,541,055 |
682,527 |
Total liabilities |
19,312,649 |
18,529,130 |
2,784,953 |
EQUITY: |
|||
Class A ordinary shares (US$0.0001 par value, 483,489,642 shares |
66 |
66 |
10 |
Class B ordinary shares (US$0.0001 par value, 16,510,358 shares |
11 |
11 |
2 |
Treasury shares, at cost - 1,356,918 shares and -297,480 shares as of |
(707,441) |
(151,578) |
(22,782) |
Additional paid-in capital |
3,130,126 |
3,122,281 |
469,283 |
Retained earnings |
3,653,026 |
4,929,480 |
740,908 |
Accumulated other comprehensive loss |
(343,608) |
(147,807) |
(22,215) |
Noncontrolling interests |
49,624 |
(31,859) |
(4,788) |
Total shareholders' equity |
5,781,804 |
7,720,594 |
1,160,418 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
25,094,453 |
26,249,724 |
3,945,371 |
Vipshop Holdings Limited |
|||
Reconciliations of GAAP and Non-GAAP Results |
|||
Three Months Ended |
|||
September 30,2016 |
September 30,2017 |
September 30,2017 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Income from operations |
528,787 |
448,201 |
67,365 |
Share-based compensation expenses |
126,165 |
170,825 |
25,675 |
Amortization of intangible assets resulting from business acquisitions |
77,093 |
84,161 |
12,649 |
Non-GAAP income from operations |
732,045 |
703,187 |
105,689 |
Net income |
345,204 |
318,456 |
47,864 |
Share-based compensation expenses |
126,165 |
170,825 |
25,675 |
Impairment loss in investments |
65,940 |
0 |
0 |
Amortization of intangible assets resulting from business acquisitions and |
91,556 |
84,161 |
12,649 |
Tax effect of amortization of intangible assets resulting from business |
(19,887) |
(21,040) |
(3,162) |
Non-GAAP net income |
608,978 |
552,402 |
83,026 |
Net income attributable to Vipshop's shareholders |
342,861 |
338,055 |
50,810 |
Share-based compensation expenses |
126,165 |
170,825 |
25,675 |
Impairment loss in investments |
65,940 |
0 |
0 |
Amortization of intangible assets resulting from business acquisitions |
76,523 |
67,857 |
10,199 |
Tax effect of amortization of intangible assets resulting from business |
(16,009) |
(16,965) |
(2,550) |
Non-GAAP net income attributable to Vipshop's shareholders |
595,480 |
559,772 |
84,134 |
Shares used in calculating earnings per share: |
|||
Basic ordinary shares: |
|||
Class A and Class B ordinary shares: |
|||
—Basic |
116,178,808 |
117,641,548 |
117,641,548 |
—Diluted |
118,727,676 |
125,535,694 |
125,535,694 |
Non-GAAP net income per Class A and Class B share |
|||
Non-GAAP net income attributable to Vipshop's shareholders--Basic |
5.13 |
4.76 |
0.72 |
Non-GAAP net income attributable to Vipshop's shareholders--Diluted |
5.02 |
4.56 |
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 |
1.03 |
0.95 |
0.14 |
Non-GAAP net income attributable to Vipshop's shareholders--Diluted |
1.00 |
0.91 |
0.14 |
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