PR Newswire
GUANGZHOU, China, Nov. 20, 2017
GUANGZHOU, China, Nov. 20, 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 third quarter ended September 30, 2017.
Third Quarter 2017 Highlights
Mr. Eric Shen, chairman and chief executive officer of Vipshop, stated, "We saw healthy growth in our total active customers for the trailing twelve months ended September 30, 2017, which increased to over 60 million. Importantly, our core categories continue to demonstrate robust growth, adding hundreds of domestic and international fashion brands to our portfolio in the past quarter. We remain committed to enriching our offering, including opening up our marketplace business, which will continue to improve our user experience."
Mr. Donghao Yang, chief financial officer of Vipshop, further commented, "In the third quarter of 2017, our topline came in at the high-end of our guidance range, increasing by nearly 28% year over year. Our efforts to manage existing and new users are bearing fruit, as demonstrated by the improved stickiness and customer loyalty across our platform."
Recent Business Highlights
Third Quarter 2017 Financial Results
REVENUE
Total net revenue for the third quarter of 2017 increased by 27.6% to RMB15.3 billion (US$2.3 billion) from RMB12.0 billion in the prior year period, primarily driven by the growth in the number of total active customers and average revenue per customer.
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 RMB3.5 billion (US$526.0 million) from RMB2.9 billion in the prior year period. Gross margin was 22.9% as compared with 24.4% in the prior year period, primarily attributable to investment in promotional activities for market share gain, which is balanced by reduced spending in the Company's broader marketing efforts.
OPERATING INCOME AND EXPENSES
Total operating expenses for the third quarter of 2017 were RMB3.2 billion (US$474.1 million), as compared with RMB2.5 billion in the prior year period. As a percentage of total net revenue, total operating expenses decreased to 20.6% from 21.2% in the prior year period.
Income from operations for the third quarter of 2017 was RMB448.2 million (US$67.4 million), as compared with RMB528.8 million in the prior year period. Operating margin was 2.9% as compared with 4.4% 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, was RMB703.2 million (US$105.7 million) as compared with RMB732.0 million in the prior year period. Non-GAAP operating income margin[5] was 4.6% as compared with 6.1% in the prior year period.
NET INCOME
Net income attributable to Vipshop's shareholders for the third quarter of 2017 was RMB338.1 million (US$50.8 million), as compared with RMB342.9 million in the prior year period. Net margin attributable to Vipshop's shareholders was 2.2% as compared with 2.9% in the prior year period, primarily attributable to decreased gross margin and increased fulfillment costs due to the Company's investment into its logistics business outside of the Vipshop platform. Net income attributable to Vipshop's shareholders per diluted ADS[6] was RMB0.56 (US$0.08) as compared with RMB0.58 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, was RMB559.8 million (US$84.1 million) as compared with RMB595.5 million in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders[7] was 3.7% as compared with 5.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS[8] was RMB0.91 (US$0.14) as compared with RMB1.00 in the prior year period.
For the quarter ended September 30, 2017, the Company's weighted average number of ADSs used in computing diluted income per ADS was 627,678,468.
BALANCE SHEET AND CASH FLOW
As of September 30, 2017, the Company had cash and cash equivalents and restricted cash of RMB3.7 billion (US$556.6 million) and held-to-maturity securities of RMB230.3 million (US$34.6 million).
For the quarter ended September 30, 2017, net cash used in operating activities was RMB0.4 billion, and free cash flow[9], a non-GAAP measurement of liquidity, was as follows:
For the three months ended | ||||
| Sep 30, 2016
RMB'000 | Sep 30, 2017
RMB'000 | Sep 30, 2017
US$'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 RMB22.8 billion and RMB23.8 billion, representing a year-over-year growth rate of approximately 20% to 25%. 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 RMB6.6533 to US$1.00, the effective noon buying rate for September 29, 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 Tuesday, November 21, 2017 at 8:00 am Eastern Time or 9:00 pm Beijing Time to discuss its financial results and operating performance for the third 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: | #3299529 |
The replay will be accessible through November 29, 2017 by dialing the following numbers:
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.
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