VIPS stock is up big in pre-market trading on August 15, 2019, after the company reported total net revenue for the second quarter of 2019 increased by 9.7% year over year to RMB22.7 billion (US$3.3 billion) from RMB20.7 billion in the prior year period.
Eric Shen, Chairman and CEO of Vipshop, stated, “We are delighted to have finished the second quarter of 2019 with strong operational and financial results. During the quarter, we continued to demonstrate healthy growth momentum in our total active customers, which increased by 11% year over year. In addition, we recently announced our strategic acquisition of Shan Shan Outlets, aiming to further enhance our ecosystem and explore opportunities in online-and-offline integration. Since we refocused on discount apparel and our profitability, we have seen substantial improvement in our financial results and key operating metrics, proving our strategy is very effective. We remain committed to executing on our merchandising strategy and further expanding our market share in China’s discount apparel sector. We are confident that we can continue to deliver steady profitability improvement in the future.” Donghao Yang, CFO of Vipshop, further commented, “We delivered solid financial results this quarter with a substantial improvement in our bottom-line both sequentially and on a year-over-year basis. Additionally, we generated robust free cash flow of RMB1.2 billion during the quarter, which increased by RMB2.2 billion from the prior year period. We continue to focus on our merchandising strategy, particularly in apparel-related categories, in which the GMV grew by 19% year over year in this quarter. The focus on the high margin apparel category has and will enable us to deliver continuous improvement in our gross margin and overall profitability. Going forward, we will continue to closely monitor the return on investment from all our businesses, especially that of our investment in offline stores. We aim to achieve balanced top- and bottom-line growth and are committed to delivering long-term, sustainable shareholder return.”
The number of active customers for the second quarter increased by 11% year over year to 33.1M from 29.8M in the prior year period. Total orders for the second quarter increased by 33% year over year to 147.8M from 111.3M in the prior year period.