• Total Net Revenue: RMB20.7 billion, down from RMB22.8 billion year-over-year.

• Gross Profit: RMB5.0 billion, compared to RMB5.4 billion in the prior year period.

• Gross Margin: Increased to 24.8% from 23.6% in the prior year period.

• Total Operating Expenses: Decreased by 6.1% to RMB3.8 billion from RMB4.0 billion year-over-year.

• Operating Margin: 6.4%, compared to 6.7% in the prior year period.

• Net Income Attributable to Vipshop Shareholders: RMB1.0 billion, down from RMB1.2 billion year-over-year.

• Net Margin Attributable to Vipshop Shareholders: 5.1%, compared to 5.3% in the prior year period.

• Non-GAAP Net Income Attributable to Vipshop Shareholders: RMB1.3 billion, down from RMB1.8 billion year-over-year.

• Non-GAAP Net Margin Attributable to Vipshop Shareholders: 6.3%, compared to 8.1% in the prior year period.

• Cash and Cash Equivalents: RMB22.5 billion as of September 30, 2024.

• Short-term Investments: RMB1.6 billion as of September 30, 2024.

• Fourth Quarter Revenue Guidance: Expected between RMB31.2 billion and RMB32.9 billion, a year-over-year decrease of approximately 10% to 5%.

• Warning! GuruFocus has detected 2 Warning Sign with FUTU.

Release Date: November 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SVIP membership growth remained strong with an 11% year-over-year increase in active SVIP customers.

• Gross margin increased to 24.8% from 23.6% in the prior year period, driven by higher-margin apparel categories.

• The company maintained disciplined financial management, delivering solid profitability despite weak top-line performance.

• Vipshop Holdings Ltd (NYSE:VIPS) has a strong inflow of quality brand supply, especially within the deep discount inventory.

• The company is leveraging AI capabilities to improve customer experience and drive growth and efficiency.

Negative Points

• Third quarter sales declined due to softer results in discretionary categories as consumers face economic headwinds.

• Total net revenue for the third quarter of 2024 decreased to RMB20.7 billion from RMB22.8 billion in the prior year period.

• Non-GAAP net margin attributable to Vipshop shareholders decreased to 6.3% from 8.1% in the prior year period.

• The company faces a challenging environment with consumer spending yet to fully recover in discretionary categories.

• Vipshop Holdings Ltd (NYSE:VIPS) expects a year-over-year decrease of approximately 10% to 5% in total net revenues for the fourth quarter of 2024.

Q & A Highlights

Q: Can management share about the recent consumer sentiment after recent government supportive measures and the expectation on 2025 outlook from the perspective of GMV and margin? A: Eric Shen, CEO: Recent business trends show October was strong due to early promotions, but overall consumer sentiment remains cautious. The governments trading program boosted some categories, but apparel, our focus, saw limited benefits. For 2025, we plan cautiously, aiming to return to growth, but macroeconomic factors and consumer confidence remain unpredictable. Margins should remain stable, focusing on profit growth.