PR Newswire
GUANGZHOU, China, Aug. 16, 2017
GUANGZHOU, China, Aug. 16, 2017 /PRNewswire/ -- Vipshop Holdings Limited (NYSE: VIPS), a leading online discount retailer for brands in China ("Vipshop" or the "Company"), today announced its unaudited financial results for the second quarter ended June 30, 2017.
Second Quarter 2017 Highlights
"We delivered solid operational results in the second quarter of 2017," said Mr. Eric Shen, chairman and chief executive officer of Vipshop. "Specifically, our total active customers for the trailing twelve months ended June 30, 2017 reached 58.8 million, representing a 32% year-over-year increase. We are also delighted to witness improved average revenue per active customer during the quarter, which was a testament of our ability to effectively manage the lifetime value of our customers. In the past quarter, we made further progress with the trial for our new Super VIP paid membership program, aiming to increase our customer loyalty. We remain focused on strengthening our core capability in merchandising and exploring opportunities to diversify our product categories to improve user stickiness."
Mr. Donghao Yang, chief financial officer of Vipshop, further commented, "In the second quarter of 2017, we made significant strides in the expansion of our logistics footprint and the enhancement of our logistics capabilities. We currently have approximately 27,000 last mile delivery staff and approximately 3,500 delivery stations. Meanwhile, we continue to make solid progress in the exploration of the Internet finance spin-off, which overtime will improve our cash flow and earnings."
Recent Business Highlights
Second Quarter 2017 Financial Results
REVENUE
Total net revenue for the second quarter of 2017 increased by 30.3% to RMB17.52 billion (US$2.58 billion) from RMB13.44 billion in the prior year period, primarily driven by the growth in the number of total active customers, repeat customers, and total orders.
The number of active customers for the second quarter of 2017 increased by 22% to 28.1 million from 23.0 million in the prior year period. The number of total orders for the second quarter of 2017 increased by 23% to 84.8 million from 68.9 million in the prior year period.
GROSS PROFIT
Gross profit for the second quarter of 2017 increased by 19.1% to RMB3.86 billion (US$569.4 million) from RMB3.24 billion in the prior year period. Gross margin was 22.0% as compared with 24.1% in the prior year period, primarily attributable to investment in promotional activities for market share gain.
OPERATING INCOME AND EXPENSES
Total operating expenses for the second quarter of 2017 were RMB3.42 billion (US$504.9 million), as compared with RMB2.65 billion in the prior year period. As a percentage of total net revenue, total operating expenses decreased to 19.5% from 19.7% in the prior year period.
Income from operations for the second quarter of 2017 was RMB621.7 million (US$91.7 million), as compared with RMB643.9 million in the prior year period. Operating margin was 3.5% as compared with 4.8% in the prior year period.
Non-GAAP income from operations[4], which excludes share-based compensation expenses and amortization of intangible assets resulting from business acquisitions, increased by 6.0% to RMB887.7 million (US$130.9 million) from RMB837.2 million in the prior year period. Non-GAAP operating income margin[5] was 5.1% as compared with 6.2% in the prior year period.
NET INCOME
Net income attributable to Vipshop's shareholders was RMB386.5 million (US$57.0 million), as compared with RMB451.6 million in the prior year period. Net margin attributable to Vipshop's shareholders was 2.2% as compared with 3.4% in the prior year period, primarily attributable to decreased gross margin and impairment loss of investments of RMB103.1 million. Net income attributable to Vipshop's shareholders per diluted ADS[6] was RMB0.64 (US$0.09) as compared with RMB0.76 in the prior year period.
Non-GAAP net income attributable to Vipshop's shareholders, which excludes share-based compensation expenses, impairment loss of investments, and amortization of intangible assets resulting from business acquisitions and equity method investments, increased by 7.5% to RMB728.2 million (US$107.4 million) from RMB677.5 million in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders[7] was 4.2% as compared with 5.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS[8] increased to RMB1.18 (US$0.17) from RMB1.12 in the prior year period.
For the quarter ended June 30, 2017, the Company's weighted average number of ADSs used in computing diluted income per ADS was 629,352,488.
BALANCE SHEET AND CASH FLOW
As of June 30, 2017, the Company had cash and cash equivalents and restricted cash of RMB4.20 billion (US$619.2 million) and held-to-maturity securities of RMB343.2 million (US$50.6 million).
For the quarter ended June 30, 2017, net cash used in operating activities was RMB0.27 billion, and free cash flow[9], a non-GAAP measurement of liquidity, was as follows:
For the three months ended | ||||
| Jun 30, 2016
RMB'000 | Jun 30, 2017
RMB'000 | Jun 30, 2017
US$'000 | |
Net cash from (used in) operating activities | 1,227,110 | (273,753) | (40,381) | |
Add: Impact from Internet financing activities[9] | 490,573 | 783,610 | 115,589 | |
Less: Capital expenditures | (587,852) | (673,891) | (99,404) | |
Free cash flow in (out) | 1,129,831 | (164,034) | (24,196) |
Free cash flow trailing twelve months ended
| Jun 30, 2016
RMB'000 | Jun 30, 2017
RMB'000 | Jun 30, 2017
US$'000 | |
Net cash from operating activities | 3,269,475 | 1,914,083 | 282,342 | |
Add: Impact from Internet financing activities[9] | 1,218,589 | 2,850,206 | 420,428 | |
Less: Capital expenditures | (4,581,344) | (2,801,534) | (413,248) | |
Free cash flow (out) in | (93,280) | 1,962,755 | 289,522 |
Business Outlook
For the third quarter of 2017, the Company expects its total net revenue to be between RMB14.9 billion and RMB15.4 billion, representing a year-over-year growth rate of approximately 24% to 28%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which is subject to change.
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 RMB6.7793 to US$1.00, the effective noon buying rate for June 30, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.
Conference Call Information
The Company will hold a conference call on Thursday, August 17, 2017 at 8:00 am Eastern Time or 8:00 pm Beijing Time to discuss its financial results and operating performance for the second quarter of 2017.
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: | #58958603 |
The replay will be accessible through August 25, 2017 by dialing the following numbers:
United States Toll Free: | +1-855-452-5696 |
International: | +61-2-9003-4211 |
Conference ID: | #58958603 |
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.
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