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Vipshop Reports Unaudited Second Quarter 2018 Financial Results
Conference Call to Be Held at
Second Quarter 2018 Highlights
- Total net revenue for the second quarter of 2018 increased by 18.4% year over year to
RMB20.7 billion (US$3.1 billion ) fromRMB17.5 billion in the prior year period. - The number of active customers[1] for the second quarter of 2018 increased by 6% year over year to 29.8 million from 28.1 million in the prior year period.
- Total orders[2] for the second quarter of 2018 increased by 31% year over year to 111.3 million from 84.8 million in the prior year period.
- Gross profit for the second quarter of 2018 increased by 4.8% year over year to
RMB4.0 billion (US$611.1 million ) fromRMB3.9 billion in the prior year period. - Net income attributable to
Vipshop's shareholders for the second quarter of 2018 increased by 76.4% year over year toRMB681.6 million (US$103.0 million ) fromRMB386.5 million in the prior year period. - Non-GAAP net income attributable to
Vipshop's shareholders[3] for the second quarter of 2018 wasRMB576.9 million (US$87.2 million ), as compared withRMB672.6 million in the prior year period.
Mr.
Mr.
Recent Business Highlights
- In the second quarter of 2018,
Vipshop's total active customers grew by 6% year over year, demonstrating that its collaboration withTencent andJD.com are starting to bear fruit. The number of new customers from these channels accounted for 24% ofVipshop's total new customers for the quarter.Vipshop's JD flagship store currently has approximately 1.5 million followers. The Company's WeChat mini-program is particularly strong in acquiring new customers and reactivating dormant customers. The number of new customers from theVipshop mini-program increased by more than 500% sequentially. - In the second quarter of 2018,
Vipshop's average revenue per customer increased by approximately 12% year over year. During the quarter, 85% of customers were repeat customers, up from 79% in the prior year period, and approximately 96% of orders were placed by repeat customers, up from 93% in the prior year period. Vipshop launched approximately 400 official WeChat mini-programs for brands in the second quarter of 2018, aiming to capture opportunities present in the WeChat ecosystem with its brand partners.- In the second quarter of 2018,
Vipshop added a regional logistics hub inShenyang, China . With this addition, the Company currently has six regional logistics hubs, located inGuangdong ,Jiangsu ,Sichuan ,Tianjin ,Hubei , andLiaoning . As ofJune 30, 2018 ,Vipshop has approximately 2.9 million square meters of total warehousing space, of which around 1.8 million square meters is owned by the Company. - During the second quarter of 2018,
Vipshop delivered approximately 99% of its orders through its in-house last mile delivery network, up from 95% in the prior year period. More than 81% of customer returns were handled directly byVipshop's last mile delivery network, up from 68% in the prior year period. - As of
June 30, 2018 , approximately 1.9 million customers enrolled inVipshop's Super VIP Paid Membership Program, representing a 30% increase sequentially. In the second quarter of 2018,Vipshop andTencent Video launched a joint membership program, offering even more value to all of their paid members. Vipshop recently added a number of popular domestic and international brands to its platform, including Mulberry and Repetto.
Second Quarter 2018 Financial Results
REVENUE
Total net revenue for the second quarter of 2018 increased by 18.4% year over year to
GROSS PROFIT
Gross profit for the second quarter of 2018 increased by 4.8% to
OPERATING INCOME AND EXPENSES
Total operating expenses for the second quarter of 2018 were
- Fulfillment expenses for the second quarter of 2018 were
RMB1.9 billion (US$286.7 million ), as compared withRMB1.6 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 second quarter of 2018 decreased to 9.1% from 9.4% in the prior year period. - Marketing expenses for the second quarter of 2018 were
RMB899.6 million (US$135.9 million ), as compared withRMB752.1 million in the prior year period. As a percentage of total net revenue, marketing expenses for the second quarter of 2018 remained stable at 4.3% year over year. - Technology and content expenses for the second quarter of 2018 were
RMB510.6 million (US$77.2 million ), as compared withRMB447.8 million in the prior year period. As a percentage of total net revenue, technology and content expenses for the second quarter of 2018 decreased to 2.5% from 2.6% in the prior year period. - General and administrative expenses for the second quarter of 2018 were
RMB615.2 million (US$93.0 million ), as compared withRMB578.8 million in the prior year period. As a percentage of total net revenue, general and administrative expenses for the second quarter of 2018 decreased to 3.0% from 3.3% in the prior year period.
Income from operations for the second quarter of 2018 was
Non-GAAP income from operations[4] for the second quarter of 2018, which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, was
NET INCOME
Net income attributable to
Non-GAAP net income attributable to
For the quarter ended
BALANCE SHEET AND CASH FLOW
As of
For the quarter ended
For the three months ended |
||||
Jun 30, 2017
RMB'000 |
Jun 30, 2018
RMB'000 |
Jun 30, 2018
US$'000 |
||
Net cash used in operating activities |
(273,753) |
(502,235) |
(75,900) |
|
Add: Impact from Internet financing activities[10] |
783,610 |
469,515 |
70,955 |
|
Less: Capital expenditures |
(673,891) |
(870,103) |
(131,493) |
|
Free cash flow out |
(164,034) |
(902,823) |
(136,438) |
For the trailing twelve months ended
Jun 30, 2017
RMB'000 |
Jun 30, 2018
RMB'000 |
Jun 30, 2018
US$'000 |
||
Net cash from operating activities |
1,914,083 |
187,270 |
28,301 |
|
Add: Impact from Internet financing activities[10] |
2,850,206 |
1,990,180 |
300,763 |
|
Less: Capital expenditures |
(2,801,534) |
(2,901,367) |
(438,465) |
|
Free cash flow in/(out) |
1,962,755 |
(723,917) |
(109,401) |
Business Outlook
For the third 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: |
#9653299 |
The replay will be accessible through
United States Toll Free: |
+1-855-452-5696 |
International: |
+61-2-9003-4211 |
Conference ID: |
#9653299 |
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" 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 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, impairment loss of investments, amortization of intangible assets resulting from business acquisitions and equity method investments, net of tax, and gain on disposal or revaluation of investments, net of tax. |
[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 means the 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. |
[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 per share data) |
|||
Three Months Ended |
|||
June 30,2017 |
June 30,2018 |
June 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Product revenues |
17,036,222 |
20,103,555 |
3,038,122 |
Other revenues (1) |
480,357 |
634,820 |
95,936 |
Total net revenues |
17,516,579 |
20,738,375 |
3,134,058 |
Cost of revenues |
(13,656,686) |
(16,694,602) |
(2,522,948) |
Gross profit |
3,859,893 |
4,043,773 |
611,110 |
Operating expenses: |
|||
Fulfillment expenses (2) |
(1,644,074) |
(1,897,097) |
(286,696) |
Marketing expenses |
(752,148) |
(899,581) |
(135,948) |
Technology and content expenses |
(447,820) |
(510,603) |
(77,164) |
General and administrative expenses (3) |
(578,783) |
(615,169) |
(92,967) |
Total operating expenses |
(3,422,825) |
(3,922,450) |
(592,775) |
Other operating income |
184,669 |
278,960 |
42,157 |
Income from operations |
621,737 |
400,283 |
60,492 |
Gain on disposal or revaluation of investments |
55,615 |
309,059 |
46,706 |
Impairment loss of investments |
(103,107) |
0 |
0 |
Interest expenses |
(19,259) |
(39,003) |
(5,894) |
Interest income |
29,684 |
62,272 |
9,411 |
Foreign exchange (loss) gain |
(36,895) |
79,557 |
12,023 |
Income before income taxes and share of result of affiliates |
547,775 |
812,168 |
122,738 |
Income tax expenses (4) |
(169,679) |
(125,486) |
(18,964) |
Share of (loss) gain of affiliates |
(7,293) |
2,092 |
316 |
Net income |
370,803 |
688,774 |
104,090 |
Net loss (income) attributable to noncontrolling |
15,680 |
(7,130) |
(1,077) |
Net income attributable to Vipshop's shareholders |
386,483 |
681,644 |
103,013 |
Shares used in calculating earnings per share (5): |
|||
Class A and Class B ordinary shares: |
|||
--Basic |
117,365,737 |
132,138,434 |
132,138,434 |
--Diluted |
125,870,498 |
140,270,995 |
140,270,995 |
Net earnings per Class A and Class B share |
|||
Net income attributable to Vipshop's |
3.29 |
5.16 |
0.78 |
Net income attributable to Vipshop's |
3.20 |
4.97 |
0.75 |
Net earnings per ADS (1 ordinary share equals to 5 |
|||
Net income attributable to Vipshop's |
0.66 |
1.03 |
0.16 |
Net income attributable to Vipshop's |
0.64 |
0.99 |
0.15 |
(1) Other revenues primarily consist of revenues from third-party |
|||
(2) Fulfillment expenses include shipping and handling expenses, which |
|||
(3) General and administrative expenses include amortization of |
|||
(4) Income tax expenses include income tax benefits of RMB 21 million |
|||
(5) Authorized share capital is re-classified and re-designated into Class |
|||
Net income |
370,803 |
688,774 |
104,090 |
Other comprehensive income, net of tax: |
|||
Foreign currency translation adjustments |
99,585 |
12,474 |
1,885 |
Unrealized gain from available-for-sale |
13,899 |
0 |
0 |
Reclassification adjustment for gain included in net income |
(55,615) |
0 |
0 |
Comprehensive income |
428,672 |
701,248 |
105,975 |
Less: Comprehensive (loss) gain attributable to |
(15,680) |
12,259 |
1,853 |
Comprehensive income attributable to Vipshop's |
444,352 |
688,989 |
104,122 |
Three Months Ended |
|||
June 30,2017 |
June 30,2018 |
June 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Share-based compensation expenses included |
|||
Fulfillment expenses |
19,058 |
21,217 |
3,206 |
Marketing expenses |
10,387 |
11,501 |
1,738 |
Technology and content expenses |
54,331 |
62,542 |
9,452 |
General and administrative expenses |
98,012 |
98,658 |
14,909 |
Total |
181,788 |
193,918 |
29,305 |
Vipshop Holdings Limited |
|||
Unaudited Condensed Consolidated Balance Sheets |
|||
(In thousands, except per share data) |
|||
December 31,2017 |
June 30,2018 |
June 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
ASSETS |
|||
CURRENT ASSETS |
|||
Cash and cash equivalents |
9,973,891 |
6,050,756 |
914,412 |
Restricted cash |
248,101 |
375,610 |
56,763 |
Short term investments |
245,981 |
2,069,249 |
312,712 |
Accounts receivable, net |
4,803,527 |
4,589,857 |
693,636 |
Amounts due from related parties |
10,191 |
62,994 |
9,520 |
Other receivables and prepayments,net |
3,674,196 |
3,964,418 |
599,117 |
Loan Receivables,net |
0 |
308,333 |
46,596 |
Inventories |
6,960,251 |
4,590,483 |
693,730 |
Total current assets |
25,916,138 |
22,011,700 |
3,326,486 |
NON-CURRENT ASSETS |
|||
Property and equipment, net |
6,660,825 |
7,099,064 |
1,072,836 |
Deposits for property and equipment |
307,859 |
407,522 |
61,586 |
Land use rights, net |
3,077,770 |
3,479,865 |
525,890 |
Intangible assets, net |
400,994 |
354,980 |
53,646 |
Investment in equity method investees |
66,334 |
462,474 |
69,891 |
Other investments |
387,640 |
875,134 |
132,253 |
Available-for-sale investments |
146,282 |
476,259 |
71,974 |
Other long-term assets |
366,760 |
253,305 |
38,280 |
Goodwill |
367,106 |
367,106 |
55,478 |
Deferred tax assets |
285,112 |
348,540 |
52,673 |
Total non-current assets |
12,066,682 |
14,124,249 |
2,134,507 |
TOTAL ASSETS |
37,982,820 |
36,135,949 |
5,460,993 |
LIABILTIES AND EQUITY |
|||
CURRENT LIABILITIES |
|||
Short term loans (Including short term loans of the |
907,310 |
1,509,830 |
228,171 |
Accounts payable (Including accounts payable of |
11,445,109 |
8,408,841 |
1,270,774 |
Advance from customers (Including advance from |
2,339,914 |
1,074,531 |
162,387 |
Accrued expenses and other current liabilities |
3,537,151 |
3,339,296 |
504,646 |
Amounts due to related parties (Including amounts |
65,022 |
51,321 |
7,756 |
Deferred income (Including deferred income of the |
203,179 |
260,618 |
39,386 |
Securitization debt (Including securitization debt of |
760,000 |
950,000 |
143,567 |
Convertible senior notes |
0 |
4,164,637 |
629,375 |
Total current liabilities |
19,257,685 |
19,759,074 |
2,986,062 |
NON-CURRENT LIABILITIES |
|||
Deferred tax liability (Including deferred tax of the |
17,007 |
5,842 |
883 |
Deferred income-non current (Including deferred |
362,649 |
381,827 |
57,703 |
Convertible senior notes |
4,094,903 |
0 |
0 |
Total non-current liabilities |
4,474,559 |
387,669 |
58,586 |
TOTAL LIABILITIES |
23,732,244 |
20,146,743 |
3,044,648 |
EQUITY: |
|||
Class A ordinary shares (US$0.0001 par value, |
74 |
75 |
11 |
Class B ordinary shares (US$0.0001 par value, |
11 |
11 |
2 |
Additional paid-in capital |
8,715,995 |
9,084,348 |
1,372,859 |
Retained earnings |
5,602,681 |
6,990,775 |
1,056,471 |
Accumulated other comprehensive loss |
(24,242) |
(37,764) |
(5,708) |
Noncontrolling interests |
(43,943) |
(48,239) |
(7,290) |
Total shareholders' equity |
14,250,576 |
15,989,206 |
2,416,345 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
37,982,820 |
36,135,949 |
5,460,993 |
Vipshop Holdings Limited |
|||
Reconciliations of GAAP and Non-GAAP Results |
|||
Three Months Ended |
|||
June 30,2017 |
June 30,2018 |
June 30,2018 |
|
RMB'000 |
RMB'000 |
USD'000 |
|
Income from operations |
621,737 |
400,283 |
60,492 |
Share-based compensation expenses |
181,788 |
193,918 |
29,305 |
Amortization of intangible assets resulting from |
84,161 |
607 |
92 |
Non-GAAP income from operations |
887,686 |
594,808 |
89,889 |
Net income |
370,803 |
688,774 |
104,090 |
Share-based compensation expenses |
181,788 |
193,918 |
29,305 |
Impairment loss in investments |
103,107 |
0 |
0 |
Gain on disposal, revaluation and value changes |
(55,615) |
(309,059) |
(46,706) |
Tax effect of investment gain |
0 |
9,967 |
1,506 |
Amortization of intangible assets resulting from |
90,129 |
607 |
92 |
Tax effect of amortization of intangible assets |
(21,040) |
(152) |
(23) |
Non-GAAP net income |
669,172 |
584,055 |
88,264 |
Net income attributable to Vipshop's shareholders |
386,483 |
681,644 |
103,013 |
Share-based compensation expenses |
181,788 |
193,918 |
29,305 |
Impairment loss in investments |
103,107 |
0 |
0 |
Gain on disposal, revaluation and value changes |
(55,615) |
(309,059) |
(46,706) |
Tax effect of investment gain |
0 |
9,967 |
1,506 |
Amortization of intangible assets resulting from |
73,826 |
597 |
90 |
Tax effect of amortization of intangible assets |
(16,965) |
(149) |
(23) |
Non-GAAP net income attributable to Vipshop's |
672,624 |
576,918 |
87,185 |
Shares used in calculating earnings per share: |
|||
Basic ordinary shares: |
|||
Class A and Class B ordinary shares: |
|||
--Basic |
117,365,737 |
132,138,434 |
132,138,434 |
--Diluted |
125,870,498 |
140,270,995 |
140,270,995 |
Non-GAAP net income per Class A and Class B |
|||
Non-GAAP net income attributable to Vipshop's |
5.73 |
4.37 |
0.66 |
Non-GAAP net income attributable to Vipshop's |
5.47 |
4.22 |
0.64 |
Non-GAAP net income per ADS (1 ordinary share |
|||
Non-GAAP net income attributable to Vipshop's |
1.15 |
0.87 |
0.13 |
Non-GAAP net income attributable to Vipshop's |
1.09 |
0.84 |
0.13 |
View original content:http://www.prnewswire.com/news-releases/vipshop-reports-unaudited-second-quarter-2018-financial-results-300695961.html
SOURCE
Jessie Fan, +86 (20) 2233-0732, IR@vipshop.com