Shares of online discount retailer Vipshop Holdings (VIPS -1.10%) took a hit Tuesday, falling as much as 17.1%. At the time of this writing, the stock is down 14.4%. The pullback follows the company's second-quarter financial results.
The decline is likely due to the company's worse-than-expected earnings per share, as well as a significantly lowered price target and downgraded rating from Citigroup analyst Alicia Yap.
Vipshop reported revenue of 20.7 billion RMB, or $3.1 billion. This was up 18.4% year over year from 17.5 RMB in the year-ago quarter.
Non-GAAP net income for the quarter, however, fell from 672.6 million RMB in the year-ago quarter to 576.9 million RMB, or $87.2 million. This translates to non-GAAP EPS of $0.13 for the quarter -- about $0.02 below the consensus analyst estimate for the key metric.
In the second-quarter earnings release, CEO Eric Shen turned investors' attention to the company's positive trend its active customers. Total active customers were up 6% year over year to 29.8 million. CFO Donghao Yang noted that the company's average revenue per customer was up 12% year over year -- "a testament of the loyalty of our customers."
But Citigroup's Yap downgraded the stock to a sell rating from a buy while cutting her price target from $17 to $8. According to TheFly, Yap was concerned with "declining margins and decelerating growth."
CFO Donghao Yang remains confident in the company's strategy. "As we continue to procure desirable products and offer them to our customers at favorable prices, we believe we will create more differentiation and further expand our market share over time," Yang said.
For its third quarter, management said it expects revenue between 17.3 billion RMB and 18.1 billion RMB, representing year-over-year growth between 13% and 18%.