Vipshop Holdings Limited (VIPS) 22 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited First Quarter 2024 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 first quarter 2024 earnings conference call.With us today are Eric Shen, 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 US Private Securities Litigation Reform Act of 1995.

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

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customers. a steadily our building flow and based us for are national more up and to treasure broad brands provide hunting relationships, on brand view We deep global our keep to select of assortment date wide-ranged

with of needs mix Our make in further product customized Made supply the well-known team's of merchandising dominant branded to continue brand better affordable to expertise portfolio customers buying deep have the at really share our range levels. welcome product products of discount feel as consumers our remain even choice, and disciplined discount We a cautious. XXX ability the more price Vipshop ago. than from managed gives more we year Through The of the partners, meet who customers selections. us line to for are double to style brand

grow to more with category.Across We place our by preferred will value, people customers apparel are a get that for of spending. looking geographies, for share more products are chance to see in are we to repeat good value pleased the Vipshop orders Made closely high-quality tend who

continue drive value We for price. customers our beyond to the compelling

these to They seamless price, great on are received special program good enjoy they taking product things privileges. to are they the They and VIP our others.We repeat also shopping purchase. customers. exchanges. simplified are easy results for leads the quality start service. enhance members promotion, to sales from make brand to more which our addition loyalty our the the it rely like and encouraging. and offering and a how in offerings. All authenticity, customers experience, additional different Super We low-yield promotions buy of to It's In the of because That's conscious online to off-line in are offerings combination returns we initiatives building launched first [indiscernible] Initial so connections and quarter.

to gain company, the reinforce Within continue to efficiencies. we efforts our

progress We technology and are latest our in better deploying the working to business. design

tradition, are effectively with generate and engage help photos are cautious model the to product efforts of long-term customers optimize marketing to to we engagement AI we and example, applying potential in we adoption For outlook, further year.While of more with our drive we solution their our partners in course this brand ability the and generate confident the expect near-term videos improve results. to remain our over

the believe high-quality We Our cohorts. unique have age in results. foundation in our the partners customers opportunity over to value grow proposition hand CFO, solid our we to best income capture allow grow to business brand call years let Wang, this and Mark ahead.At our interest me over to and financial us point, the a see we go across of the service to

performance. report in line Thanks, moving despite team our growth are strong the quarter dynamic Okay. top to quickly efficiency operating quarter, hello, of the another and to to Eric, In gains. everyone.We environment well, first drive response executed pleased profit

as affordability margins merchandise opportunity proposition X.X% priorities to into margin a reinforcing capture a that operating conscious across the category and to XX.X% aided to remain the mix of As with preference year body a deliver and solid consumers well brand better consolidated attributable long gross term. financial a focus we ago, ongoing discipline.As consistent maintain our value to positions, were the sales. great will as value to for with able Vipshop's driven, we we healthy. Non-GAAP shareholder the fits increased are consumer apparel return shareholders deliver our profitability believe higher-margin fundamentals of X.X% help from margin and offering specifically, growth, customers.We another partners from all on efforts result, good More high XX.X% expanded we by our year net very to primarily growth see ago, with to and quality from record remain

Looking plan less shareholders, to repurchase to of commit to our our share XXXX, financial the detailed moving XX% we income quarterly year Vipshop's to no for distributions.Now net attributable of than in our benefit non-GAAP discretionary full and/or highlights. dividend XXXX shareholders

billion terms would of to revenues that like I for RMB XX.X increased Before year-over-year the and period. to RMB Total operating expenses in X.X% from to X.XX otherwise prior noted.Total increased present are in X.X prior by year-over-year Gross year to started, numbers margin from increased RMB the year-over-year RMB in increased the billion from RMB I Gross in by from X.X% XX.X profit X.X all year billion year billion clarify XX.X% all by financial XX.X% are below to percentage in X.XX unless period. XX.X% net terms period. quarter billion the period. XXXX RMB year year-over-year prior first prior billion the renminbi, the get

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

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

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

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

RMB X.X% Non-GAAP from revenues, a year billion in expenses to margin billion RMB of X.X by income to shareholders year Non-GAAP by the X.X% to year RMB period.Income to the X.X% period. of XXXX, RMB and increased attributable in general attributable X.X XX, period. Operating X.X% increased and attributable RMB period. Vipshop's RMB from to the year billion increased billion X.XX year-over-year billion. year As prior XX.X% shareholders year in Vipshop's XX.X% and increased of in X.X margin period. to X.X% year-over-year shareholders the period. equivalents from prior of the to in had prior the margin to X.X prior from billion Non-GAAP period. period. in total period.As XX.X% prior Vipshop's year-over-year from X.X Net from year Vipshop's in RMB year prior shareholders income attributable by XX.X% X.X from period. operating margin prior X.X shareholders X.X% RMB RMB from percentage net prior the attributable Vipshop's Net short-term in year operations the income operations to year-over-year ADS to net by in company X.X% the prior period. from increased from attributable increased RMB billion and prior from XX.X% administrative XX.X% billion year to year cash the per to RMB X.XX from billion net X.X% X.X increased in Non-GAAP decreased to to per the billion March increased Net increased increased X.XX RMB investments income cash the diluted RMB to cash restricted Non-GAAP X.XX RMB ADS prior from in income to Vipshop's X.X the net diluted shareholders XX.X to

XX.X view I and a to like approximately year-over-year our between this to revenues to [XX% second to Looking quarter now our to Please current RMB total the we is reflects market decrease and note forecast be to representing operational call change.With open expected X%.] Q&A. of the of XXXX, billion, conditions, of subject that, which net preliminary RMB billion X% XX.X to forward and would that

comes we're [Operator Alicia question first you. from of and to the Thank Yap take Instructions] Citigroup. line it our from Now going

guidance. the regarding question a have I

factored latest So higher the in or factors been you of little just that sluggish second been your drivers into to guidance. you Is curious related and factor-in that a rate. revenue a bit has return quarter have what actually terms demand the

So how you see helpful. any the you color trends would of be in [Interpreted] terms provide can quarter and demand second

Okay. [Interpreted]

have consideration. to QX on numbers guidance, we the actually factored For

the very on for spring a during First, seasonal parallel And we and summer, base the extended very favor sales shortens right apparel sales, same second, window really last which a early for faced a closing. especially it we comp, the timing, a winter we And had did from shift. depends And the which also have actually industry. year, we dynamic tough third, high really not still well does that quarter us.

on our focus So profitability. maintain core solid stabilizing we business to

growing for customers subsidies And spring among in This to behavior because contribution in ties customers reach are also it the marketing and and mentioned, they our not you it's different loss an of large-scale are sales invested likes used resulted from higher spend SVIP among acquire aggressively. rate to has platforms. who our who return -- have yes, to when shop very primarily nicely from platforms. some the who exchange to still different e-commerce been It's We customer lastly, of very up. members,

line take Sachs. next we're Instructions] [Operator going question Goldman our from Ronald of the Now and from to question Keung comes

announcement May base then My X% trends question are are March. issue buybacks is the guide the the on remaining we shopping this due all a in we to April June, we Does imply XX shares we've festival of end basing last for committed this ask, bought was with a first X XX.X million quarter. around expecting we're of it's on I into year. X%, [Interpreted] June kind minus to first this by to just first the that the quarters? of up the as quarter mostly worth step-up or as share in softness million seen But We've And shareholder first to particularly is RMB want XXX RMB return. mainly seen significant then of on year.Second and have back to the we in

adjust execute our best question, been to promotional quite than XX, for this right. is it started going and as try extended we the situation and from sales year. quarter-to-date, business from given it's season, year, the to are And you your we to it On last trying and the faced to start first doing expected, for has different momentum the May [Interpreted] month, last X softer

cautious about to ending going momentum and up try down. remain we forward, the So sales

of terms to So try will also, conservative we disciplined And be be will to we quite in be in operations. our the outlook. continue

return okay? stable Okay. returns. We're combination you the second to policy, Thanks question provide for long-term and shareholders' dividend way, use with the question Let shareholders consistent the and committed buyback your the to returns, a a for we'll relatively regarding shareholder the this to me in okay? of and answer continue annual

form We have and dividend. X.X buyback returned since XXXX to shareholders over the April billion of in USD

dividend For USD XXXX, million we announced have adopted dividend. policy an annual XXX and

are and In X-year we our attributable about buying to shows are will a than way. addition, billion I buyback year remaining your our benefit existing less regarding answers [indiscernible] the year-end. million steadily in return our amount determination repurchasing to share to Furthermore, plan we consistent question. this full XX% and income XXXX. to USD dividend December our shareholders, Vipshop discretionary XX, shareholders back stable mentioned non-GAAP the approximately repurchase by the looking no of XXX implies insistence by and committed value hope our long-term, of the records of we that in XXXX, the to planning almost powering shares future X and to utilize for USD All shareholders XXXX I net commit This distributions. and

to going And our we're question from comes Morgan Now of take Eddy from the Wang next the Stanley. line next question.

[Interpreted] competition. question is about the So my first

seen the subsidy, we terms especially a the granted. competition that mentioned Shen from have intensive peers, As of more in

our I field will to in strategy.Secondly record view, first more the current in we side, short-term, decline So also to deter our for to long-term year-over we the of we user the the like understand quarter will or follow a take we this But current you is this stick the if a year. may relatively strategy subsidy user continue aggressive strategy. be

user want to on the your in just strategy view year third So and the term.And the your one is in growth, hear the this longer about AOV.

AOV quarter basis. in on see a we increased year-over-year this that actually So

So proportion users up. the is this because of of the coming the SVIP,

to be will quarter. a leads AOV any higher as in reasons or it actually this So higher other

more best our are our value competition. to have merchandise offerings value in the in nowadays, [Interpreted] product safety, seldom has capability our a loyal brand platforms our leave partners continue to proposition of customers the platform to looking wouldn't and has at interest to and we uniqueness retail. So its on bring our branded our in each who relationships the but blindly us. industry partners Actually, flow cetera. will and peers question many better broaden continue will why That's of in And customers. who steady deliver this on And discount we strategy subsidies. be deliver terms et have and our to There brand our on so on brand of the are to customers right in entity, deepen first been lies with serve laser-focused unique many value quality investing to we of and large-scale follow want to to to e-commerce

other QX, on LTV have customer face than base certain the spend, up hand, the terms want at as would decline we still realize They're Of in in has That's platforms. is competition, have customer very stop actually had marketing strict we other we they higher course, growing acquiring in sensitive, prudently a the competition resilient. active double ARPU price long to or price base and still core requirements that marketing in We faster SVIP, focus their digit acquisition, customer as terms continue we little of slight all, especially customers be of more in want than and who our more But we in going current of those spend. quite on sector customers. some will only platform, bit customer. new we more but high-quality there it's in because in be are are level, subsidy we aggressive by investing who to the your high our more terms aggressive customers to driven the in but After that, QX, second question, customers.On of the said will Having customers. quality. a average bring a are of entering will into been on

restrictions on to the per trend, you gaining lastly, an way.And make to SVIP momentum. customer cautiously and in representative actually, our will the of more of GMV good effective our efficient the traction. still are terms really we relax customers members the we at trend, look in customer, very continue LTV if an upward So sure acquire that's

they customers. and their shop than come offerings are as continue earlier, average as shop services, right as it demonstrated best-in-class mentioned SVIP us more. long I move, with As ARPU them the investor And the faster they providing interest that more to growing merchandise as of well will serve our our will and we members,

our drive for continue cohorts SVIP well a as the We customer to core very our of growth believe So are customer quality in us we foundation the maintain expansion will future, strong as profitability. base. that good to

we me, any have Excuse questions? further do

you. Thank No.

there Dear speaker, you. to the for speakers, now hand today. closing I like no your for Thank would further are questions any Jessie to remarks. conference Zheng over

Thank for the taking us time today. join to you

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

That does participating. for conclude Thank our conference you for today.

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