Vipshop's Blowout Quarter Is Good for Vipshop, Great for China
It may seem hard to call a quarter of declining net revenue and reported earnings a blowout performance, but that's just what Vipshop Holdings (NYSE: VIPS) pulled off on Wednesday. The Chinese online discounter of brand-name apparel and accessories saw its top line decline 12% to $2.7 billion for the first three months of 2020, relative to a year earlier. But that's not a bad thing.
Back in early March, Vipshop was forecasting a 15% to 20% year-over-year slide in net revenue for the quarter. Analysts were perched at the kind end of that range, modeling $2.54 billion in revenue. Reported income took a 21% hit as margins contracted, but adjusted earnings actually managed to climb 20%, to $0.20 a share.
Vipshop doesn't offer bottom-line guidance, but Wall Street pros were bracing for the adjusted profit to decline to $0.11 a share. It may not be a blowout on an absolute basis but it's hitting all the right notes with investors on a relative basis. The stock shot higher on Wednesday morning following the report.
Source Fool.com
