Vipshop Q1 Shows Triple-Digit Growth

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China-based online discount retailer Vipshop Holdings (VIPS) reported first-quarter earnings after the market closed Wednesday that beat consensus estimates as it raised Q2 guidance.

Revenue rose 126% to $702 million in Q1 from the year-ago quarter, surpassing the consensus estimate of $652.2 million. Adjusted earnings per share of 63 cents rose 270%, beating the consensus estimates of 48 cents.

For Q2, Vipshop estimates revenue in the range of $780 million to $790 million, above the consensus view of $688 million, of analysts polled by Thomson Reuters.

Vipshop stock was up 2.5% to 150 in after-hours trading.

The company launched its IPO in March 2012. Priced at 6.50, the stock is up more than 2,100% since then.

Vipshop said active customers for the first quarter of 2014 rose 165% to 7.4 million from the prior year period. Total orders increased by 129% to 20 million.

First Quarter 2014 Highlights

   Total net revenues increased by 125.9% over the prior year period to US$701.9 million, primarily attributable to a 165.1% increase in the number of active customers[1] to 7.4 million from 2.8 million and a 129.3% increase in total orders[2] to 20.2 million from 8.8 million over the prior year period.
   Gross margin increased to 24.9% from 23.4% in the prior year period.

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China’s slowdown stabilized last month in the wake of monetary stimulus and a loosening of fiscal restrictions on indebted local governments.

Growth in industrial output and credit accelerated, helping offset a further drop in the pace for fixed-asset investments which includes property construction, coal plants and infrastructure projects. Bloomberg’s monthly gross domestic product tracker advanced the most since January, narrowing the gap with Premier Li Keqiang’s expansion target of about 7 percent for the year.

Along with strong jobs gains in the U.S. and improving readings from Japan, stabilization in China bolsters a global outlook that’s clouded by uncertainty in Europe. The steadier economic report card gives Li more time to assess the impact of monetary easing and a debt-swap deal to help local governments.

“The economy was bottoming in May,” said Wang Tao, chief China economist at UBS Group AG in Hong Kong. “We won’t see a strong rebound, but we will see a slight improvement in the third quarter, as all kinds of stabilizing measures intensify.”

Industrial output rose 6.1 last month from a year earlier, the statistics bureau said Thursday, accelerating from 5.9 percent in April and beating the median estimate of 6.0 percent in a Bloomberg survey. Retail sales added 10.1 percent in May, while fixed-asset investment excluding rural households climbed 11.4 percent in the first five months.

Aggregate financing, which includes bank loans and off-balance credit, was 1.22 trillion yuan ($197 billion), the People’s Bank of China said. That compares with the median estimate of 1.13 trillion yuan in a Bloomberg survey. New yuan loans were 900.8 billion yuan.

The Shanghai Composite Index rose.

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