Vipshop Holdings (VIPS) Misses Q4 EPS by 3c, Revenues Miss

Vipshop Holdings (NYSE: VIPS) reported Q4 EPS of $0.15, $0.03 worse than the analyst estimate of $0.18. Revenue for the quarter came in at $3.8 billion versus the consensus estimate of $3.96 billion.

• Total net revenue for the fourth quarter of 2018 increased by 8.1% year over year to RMB26.1 billion (US$3.8 billion) from RMB24.1 billion in the prior year period. Total net revenue for the full year of 2018 increased by 15.9% year over year to RMB84.5 billion (US$12.3 billion) from RMB72.9 billion in the prior year.
• GMV[1] for the fourth quarter of 2018 increased by 15% year over year to RMB41.8 billion from RMB36.3 billion in the prior year period. GMV for the full year of 2018 increased by 21% year over year to RMB131.0 billion from RMB108.4 billion in the prior year.
• Gross profit for the fourth quarter of 2018 increased by 2.8% year over year to RMB5.4 billion (US$783.1 million) from RMB5.2 billion in the prior year period. Gross profit for the full year of 2018 increased by 4.8% year over year to RMB17.1 billion (US$2.5 billion) from RMB16.3 billion in the prior year.
• Net income attributable to Vipshop's shareholders for the fourth quarter of 2018 increased by 2.3% year over year to RMB688.7 million (US$100.2 million) from RMB673.2 million in the prior year period. Net income attributable to Vipshop\'s shareholdersfor the full year of 2018 increased by 9.2% year over year to RMB2.1 billion (US$309.6 million) from RMB1.9 billion in the prior year.
• Non-GAAP net income attributable to Vipshop's shareholders[2] for the fourth quarter of 2018 increased by 2.9% year over year to RMB913.6 million (US$132.9 million) from RMB888.1 million in the prior year period. Non-GAAP net income attributable to Vipshop\'s shareholders for the full year of 2018 was RMB2.7 billion (US$395.5 million), as compared with RMB2.9 billion in the prior year.
• The number of active customers[3] for the fourth quarter of 2018 increased by 13% year over year to 32.4 million from 28.6 million in the prior year period. The number of active customers for the full year of 2018 increased by 5% year over year to 60.5 million from 57.8 million in the prior year.
• Total orders[4] for the fourth quarter of 2018 increased by 35% year over year to 140.3 million from 104.2 million in the prior year period. Total orders for the full year of 2018 increased by 31% year over year to 437.4 million from 335.0 million in the prior year.

Mr. Eric Shen, Chairman and Chief Executive Officer of Vipshop, stated, "We are pleased to have finished the fourth quarter of 2018 with solid operational results. During this quarter, our total active customers grew by 13% year over year, which is a testament of the effectiveness of our merchandising strategy. Going forward, we will continue to strengthen our core capabilities, aiming to bring highly desirable selections of products to our valued customers on a daily basis, which will drive our long term growth and profitability."

Mr. Donghao Yang, Chief Financial Officer of Vipshop, further commented, "In the fourth quarter of 2018, we saw a healthy sequential recovery of our bottom-line, which is mostly attributable to our focus on the highly profitable apparel category. During this quarter, we began to shift some low-margin categories from our first-party business into the marketplace platform, reducing their drag on our bottom-line while still delivering a solid GMV growth of 15% year over year. We remain focused on stabilizing our margins, aiming to drive enhanced shareholder return in the long run."

Business Outlook

Starting from the fourth quarter of 2018, GMV contribution from the apparel category with a relatively high return rate among all categories has increased, and the Company shifted certain standardized categories from its first-party business into the marketplace platform in order to improve profitability. Revenue generated from the marketplace platform is recorded as other revenue instead of product revenue. In light of this development in revenue mix, the Company began to disclose GMV to provide an additional perspective for the market to measure the scale of its business.

For the first quarter of 2019, the Company expects its total net revenue to be between RMB19.9 billion and RMB20.9 billion, representing a year-over-year growth rate of approximately 0% to 5%. These forecasts reflect the Company\'s current and preliminary view on the market and operational conditions, which is subject to change.

For earnings history and earnings-related data on Vipshop Holdings (VIPS) click here.

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