Vipshop Holdings Limited (VIPS) 14 Nov 232023 Q3 Earnings call transcript

Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited Third Quarter 2023 Earnings Conference Call.At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed.

Thank you, operator. Hello, everyone, and thank you for joining Vipshop's Third Quarter 2023 Earnings Conference Call.With us today are Eric Shen, our Co-Founder, Chairman and CEO; and Mark Wang, our CFO.Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Act Reform Litigation Securities of XXXX. Private

note not harbor are cause actual call such measures turn in earnings to like statements measures.With that would release statements expectations, be income risks but any non-GAAP statements and subject to release now outlined with call the this from GAAP. public certain and also financial which to Shen. presented may measures net made.Please I that with our Exchange accordance may potential are the used include, uncertainties GAAP uncertainties net and and as to our the and on relating results to current call, earnings extent refer per non-GAAP Securities for Commission, in those that, to non-GAAP not to applies Please details in safe risks our our Mr. Forward-looking limited over income, to the filings materially our Eric non-GAAP are the U.S. to ADS, operating reconciliations of differ to this income forward-looking

accounted GMV growth member for they and the online High-value to looked Among XX% VIP continued a deals.Active with sales increasingly in and third customer see the of Welcome, great in share. Super good the evening, our from of call.We you momentum mind capture grew year year-over-year. accelerate continued strategic thank joining decent expectations, relied drivers, apparel quarter. third and spending our with profit morning us we quarter for growth earnings third categories customers XX% to over while conference and quarter, XX% our on throughout XXXX on priority ago Good as outperform for everyone. to ahead efforts

go-to term. improvement a at are that and We merchandise traffic, clear made related for shopping partners. now expansion, it every we'd sale, best available execute product perform customized features forward be and have service us. up opportunities, with of long ] mix is rich trendy money team brand with the shoes bags. we added business apparel with grow which We value help products mix as together of products. strategic [ Vipshop well merchandise job contents this diverse several products, including carefully pushing customer, team a a users. category platform To for resource Made-for-Vipshop, for end, select our We different drive a identifying with trending system supply an that developing of Up launched This continued we more faster allocation, and that and types brands like offerings has the complete like for SKUs online for for to customer done is promotion.Also, has we deepen by destination first customers.Our brands changes a to high-end to branded apparel. and to our year and worry-free skilled their providing the new have to date, hundred we collaboration support of right tailored behaviors customized their customized and Have, On better in of better channel Must Buyers analytic partners highlights to categories of brand interest on and enlarged motivated and buyer-based like to month.The clothing

providing While customers our affordability. merchandise we committed we growing our to are are selection, with

the integrated loyalty enriched additional we get Price deal enhanced customized for Everyday Great -- fulfillment our seamless through We get partners products. popular programs.Lastly, management. with to product customer shopping of together improving we from sure page, value are service, to from guarantee, improve worry-free through detail focused overall also process through opportunities on experience seeking provide our are value they customer brand they includes efficiency out And set make unique customer the that saving best and and quality capabilities with

example, China competencies better Group of and a we our with are strategic as Program, shape in collaboration core of control Assurance to recently Quality a engagement system.With at reached Globe the business, our all of to with Certification these Enhanced upgrade our Inspect we part For our quality deepen customers.

VIP our Super consecutive growth. member the strengths interaction. big more trust, of that Our than Overall, members of value every Super they've enjoyed VIP double-digit others and ease recognize has because at quarters also our retention in face still up.As and environment. challenging stand Average spending firm are we higher. ahead, rates are ticking look the of business is renewal a trending we will confident

brand consistent We product positioned customer our partners to established is trust supply and are a And we to spending. level are performance customers. aligned value that for deepening the with we uniquely encouraged see secure to with

confident We a go point, sustainable our with results. growth let CFO, call over this to player being hand me prospects.At stable, Wang, are over financial about the to long-standing our Mark

Leveraging Non-GAAP Good quarter. elevated our evening, morning shareholder and Non-GAAP to continued level margin delighted categories slow third on apparel high-quality of share from shareholders all-time high good points exceeded X the Thanks, With maintained item. managing while we the as satisfactory from year-over-year X.X%, to X net we increased in a results a and XX.X%, benefiting quarter years, merchandise perspective. by discipline record delivered margin see interest Vipshop's in value-for-money profitability long-term mind Eric. value favorable percentage is growth, margin category and customer revenue everyone.We high portfolio. of despite mix operating attributable strong.Gross that are focus to expense offering, season X.X%.Meanwhile, we expectations. at growth optimized every in primarily stayed an our third remained high

third of since end to repurchase shareholders We XXXX. the executing our share approximately our of program. April to of billion remain quarter, USD total X committed a returned we have As

to underlying moving our our offerings.Now, positive enhanced consumers business capture we for by are help growth outlook, forward, chain Going financial quarterly will believe unique our to detailed us on highlights. the from supported opportunities needs by the long-term model. efforts We merchandising strengths supply increasing presented value-for-money of

XXXX period. numbers would X.X and consumption from prior in prior renminbi, period, quarter RMB are by increased primarily in spending of categories. from to profit all Gross percentage increased I RMB recovery operating the driven X.X by the for year all the to XX.X increased XX.X% the X.X% clarify XX.X% period.Gross year-over-year of XX.X% X.X X.X% and active in XX.X prior started, below the from change in growth year-over-year discretionary revenues presented billion get otherwise the by attributable to billion noted.Total billion year the margin expenses unless year-over-year from I changes, prior RMB RMB X.X Before billion customers RMB the like are in financial increased that to to billion by in RMB third net billion in to year Total year-over-year year period.

as from was billion expenses year the As a net prior total X.X RMB the period. of in year increased by expenses RMB prior compared total in XX.X% revenues, period. X.X to with percentage billion X.X% Fulfillment operating XX.X% year-over-year

fulfillment year period. As as period.Marketing RMB increased of net RMB total compared expenses XXX.X X.X% a year-over-year percentage million in the by expenses from to the revenues, was XX.X% XXX.X prior prior year in with X.X% million

the period. XXX.X a year year in increased compared of XX.X% X.X% to expenses in million as expenses RMB RMB from and prior period.Technology million was As revenues, marketing prior by XXX.X total content the with year-over-year X.X% percentage net

X.X% As increased to billion and prior X.XX by administrative compared revenues, prior expenses in X.XX of year the the billion total from RMB expenses net percentage technology content X.X% year-over-year and in year was a period.General with period. RMB X.X% as

to to RMB increased period.Net X.X to margin X.XX from X.X% Non-GAAP prior year-over-year was billion increased from the per percentage administrative period. attributable income by in year year margin net by prior the operations shareholders attributable the RMB period.Non-GAAP was X.X to the shareholders that Vipshop's prior in with X.XX RMB increased Vipshop's from RMB to X.X% RMB prior was billion RMB to period. compared Net of RMB operations from prior attributable net year to prior to prior attributable and X.X X.X income Non-GAAP RMB Vipshop's X.X the margin ADS increased shareholders ADS net X.XX billion which year X.X X.X% as period. as year to Vipshop's a period.Income in X.X% compared shareholders diluted X.X% increased Non-GAAP X.X% increased prior RMB to in in X.X%, the Non-GAAP total the to year from prior the income prior in general period. in billion year X.XX Vipshop's flat year in As from compared as billion X.X revenues, year period. shareholders shareholders year in RMB the net billion period. with billion in to attributable Net year-over-year period. by diluted Vipshop's margin prior to RMB stayed billion income was the Operating expenses as from with the X.X% XX.X% from from X.X attributable compared operating increased with per XX.X% X.X% XX.X% income RMB in period. year year-over-year

to a and that, and now is we these As that to fourth call RMB representing reflects revenue change.With expect X%. the operational short-term XX.X RMB we and RMB forward view quarter net market to investments forecasts be which increase X% of of XX.X million.Looking to the cash RMB million cash billion of and XXXX, conditions, XX.X open year-over-year between and XXXX, would current of and XX, Q&A. approximately note the September Please equivalents cash of billion, like restricted our our preliminary subject to I to had XXX.X of total

take [Operator our first Instructions] will We now question.

is from First the from Jefferies. Thomas Chong line of question

have X and we feedback the we that latest comment question trend in in Thanks Language] year should my the and about management of My XXXX GMV the competitive November is environment?[Foreign on month Double second about how about questions. outlook. far taking also first Can also are our is management next so about question for I think XX.My outlook seeing questions. and October the

[Interpreted] Okay.

recent actually, entering But -- expected. actually been outperforming weeks, very XX than during event. categories XX in the overall closing weather On and apparel latest a recent growth was meaningfully. to the GMV Double up GMV the growth, the think double-digit coming average the I abnormal muted, because autumn/winter apparel categories question performance Double into for seasonal has of have reached the overall especially of during bit performance slower And conditions quite in nicely industry later shift October seemed QX, months, in especially first for picking than the

So, healthy we weather on much of XXXX, strategy performance.For some focusing ] depicting conditions. winter rest the continues depends, still still we expected, the our than the achieving [ expectations ahead, stable and colder on If overall the growth. it quarter, have be have but should to year especially the for better

the term. we all believe we factors things to boost very environment especially it's track. be lot are on reached as a remain no our the growth to industry been are continue the have years, player of lot uncertainty strategy. level, front, for for of gross remains, the we a growth, margin, but especially think trying matter And net And through for margin of stable we and looking course, healthy or different customer better current are in the other on developments the a margins, couple to healthy especially of we and the focused the ways a ahead. I customer on profit long consumption that But last will for pressure, healthy year the

take of the Sachs. next from line Keung now question from question. our will is The Goldman We Ronald

X So, have I questions.

upside for think then see think, kind gross terms is, of margin levers gross gross is question second should But apparel buyback new quarter. because let's see from the mix, how the that this boosted that should gross a into, margin the XXXX? a on big mix is here the reached First has high quarter we quarter. I over in level?And that of we in are have margins the with see the our we What When of margin high. say, -- apparel, new uplift my we about should

reiterated I let's quarter quite second say, the absolute to, is buyback quarter. plan. during spent think the management ongoing compared amount the small just But the

translate our or unusual to quarter, want a plan buyback Language] or just pretty price an buyback to of I [Foreign and each throughout is onshore So, me which schedule balanced it function offshore? is cash, we Or have is a quarter?Let our myself. know, share

Okay. [Interpreted]

customer a higher place. was margin On in offered question better in take actually higher of our the with And and increasing about typically incentives the the still of healthier it's how level.So, although to And by other which rate QX lot margin for category, so It's further rate a And of business us issue for well business initiatives, terms save rate, room GP in that way much a the we in as the that from have the a NP we especially lot We ahead brand especially NP driven first had margin. customers. margin especially some our partners. been high QX, take not well terms much want a changed can a on brand we find we partners grow room for the improve margin, won't they margin as in the season expansion GP peak from think partners GP has actually cost-saving think coupons in us, of to -- margins, year-over-year. further not apparel brand primarily think to expansion. grow we contribution partners, as QX we save and have together for or take take the hand, But our We we that And -- money. their relatively on reached has well. brand actually for expansion, that the it not that is for there of from year much. instead increase incentives put customer to because

of margin we especially QX. have leverage, the still So, for front. economy And we expense operating marketing XXXX, in higher a and see NP on some some just scale

only be to returns a and prudent when invest there are okay. where we continue feel need, We the and and is

So, not had still some XXXX we has room XXXX. think but for meaningful for as NP we expansion, versus as seen margin

been great share I the buyback. question Mark. is programs. have executing Well, question, your Okay. regarding your Ronald, okay? will we answer thanks our for steadily And buyback first, this

the X is quarter, to, being see, that we executing returns about growth for ] USD a quarter from stable third returned third of the some from to volatility. long-term way XXXX. And USD Difficulty] committed and to USD of think as account repurchase XXX total The with but we As around remaining current we program. shareholders prospects. our are buyback executed.Secondly, we our been have have second [Technical last our time utilized to we quarter billion buyback starting not now flexibility, we about of is factors X confidence relatively doing in into to least, a have time The [Technical And take the share billion also, of Difficulty] XXXX, show [ million shareholders as providing investors. those

the share So this programs. is regarding buyback

from Next Citigroup. question of the from line Alicia Yap is

are I wanted will to enter quickly, we demand plans to your your improving level? year's and think for growth so the experiment ask to the XXXX growth with the consumption year? What Very next sentiment outlook apparel normalizing as enhance or strategies be for does or percentage what user management normalized discretionary spend frequency? likely could be this the VIP's growth, And from purchasing

XXXX the for that sustainable achieve On are we confident growth [Interpreted] growth and stable pretty the outlook, term. we long can

number of with e-commerce limited a We player China's customers. and active are in still very small a industry

lot So, grow customer to our we potential still of base. have a

that. We are confident very about

buyout to think hand, and marketing offerings test we offerings. and in spend, retention portfolio, for especially to unique customers customized continue help grow merchandising a new the to offerings factor of SVIP well more And merchandising as addition our as customers made the us important improve members. Vipshop's our expand faster.We our portfolio to existing continue On grow including one is we

to We active our product still of XXX customer will continue add these customers. we annual to of million have leverage customers. base, offerings the to combination speaking the value And

as continue will base to level categories, and unique experience retail think the and one upgrade the we we as be meaningfully. our segment. enhance continue should And customer focus in this our long to our apparel only very customer to kind and services, can grow on of current vertical we as platform So, from we better the

This We'll of Instructions] next [Operator from Jialong the question. now take Nomura. line from our is Shi

asked the questions will X ask questions translate my I just I to [Foreign then first Chinese, them in will Language]So, I management. myself.

follow-up the The is first a question question buyback. on

size expect fully up also authorization the buyback to program we million VIPS, management a company, Just And annual XXX may earlier consider when the on ideas, gross the on is of million utilized. rough should company on a USD management's may or the to basis?The some follow-up provide company consider wonder wonder an question continue if we second buyback just the top can remark plus margin. if what carry is Board buyback

just the question current I going wonder VIP forward?And is of will to to So, members. if able stable third be VIPS XX% gross Super about the number margin maintain the XX%

this wonder in member the from Super EBITDA VIP contribution in revenue the is growth Just what also member Super of and the quarter the VIP QX? growth,

Okay. [Interpreted]

buyback, $XXX [ are existing we in our we Board in buyback fully to past continue the program, left seen current the plan. current close the buyback supportive on very utilizing as buyback is program. buyback of the And million ] The have is practice First, will new -- that. we the still and to execute the that

buyback approval the the ask program. Board will for the next We of

the and program, on too deeply the price finish will soon are we that buyback a As still much as to it's the given buyback, we going to to is or during management undervalued, the execute process.As continue share detail. how new approve Board we buybacks has the consensus reached even the especially as

time to that have be basis. just will You and from continuous remember to executing on a we buyback the time program

their have On not our for a much because business are expand XX%. the take GP incentivize brand we going the faster to Instead, mentioned reached over as for rate grow But further so partners. X-year there not increase earlier, room are Vipshop. high them margins going to we margin, GP of with we is to us we to

for level be room at as gross year, especially XXXX, improve gross not similar in us to margin compared the maintaining is the there next too to But much for margin. So, will margins. with that we scale operating I've quarters relatively mentioned the and chance leverage. that on of good economy because the NP a have of margins, good of gross also still And expanding

we And accounting are double-digit outperforming, including cetera. members We online spending. far, that.On XX% have maintained confident SVIP the our growth on currently frequency, SVIP X.X all SVIP, are for for quarters ARPU, for customers, of million operating have metrics pretty they so and active several et

more term. customer will they on and their for the continue loyalty platform SVIP the focus so our spend longer trust elevating and maintaining that efforts we to So, much our base, with can

Okay. This and give value like you we think your and quarter. billion we supplement our our the Therefore, comments volume is one USD the all. question And can is share would think buyback for the we Mark. create long-term regarding I to I share Jialong, every buyback. give have Yes. that I do prospects. That's time, accurate regarding time okay? buyback question, program we confidence amount your X growth X a share will execute that will target to and some in lasting concept shareholders, for have okay? to from return But program not have or buyback share thing years, for we

to At session. question-and-answer this the turn time, conference closing Jessie remarks. today's will I Due for concludes constraints, time that any to back

time Thank join today. us you taking for the to

quarter. any We speaking have IR hesitate to you If with please look forward follow-up contact our you to don't next questions, team.

interpreter were call.] on you you. marked Thank you today. spoken does Thank the for may the now for live disconnect.[Portions participating, [Interpreted] that present of an and are transcript this That by conclude conference