What happened

Shares of Chinese online discount retailer Vipshop Holdings (NYSE:VIPS) fell sharply on Thursday. The stock declined as much as 17.8% but was down 14.4% as of 12:48 p.m. EST.

The stock's decline was likely a result of the company's worse-than-expected fourth-quarter revenue and its weaker-than-expected outlook for first-quarter revenue.

A chalkboard sketch of a chart showing a stock price falling.

Image source: Getty Images.

So what

Vipshop reported fourth-quarter revenue of 26.1 billion RMB, or $3.8 billion. On average, analysts expected revenue of $3.96 billion. This revenue was up 8.1% compared to the year-ago quarter -- a significant deceleration from 16.4% revenue growth in Q3. 

Non-GAAP earnings per share for the period was $0.19, slightly beating a consensus analyst forecast for $0.18.

Acknowledging the company's slower revenue growth, Vipshop CFO Donghao Yang said in the company's fourth-quarter earnings release that it was a result of the company shifting "some low-margin categories from our first-party business into the marketplace platform..." But this move had a positive impact on profitability, the CFO said.

Now what

Vipshop said it expects first-quarter revenue to rise 0% to 5% year over year. Analysts were expecting 11.6% revenue growth for the period.

But Vipshop management appears increasingly focused on its bottom line. "We remain focused on stabilizing our margins, aiming to drive enhanced shareholder return in the long run," Yang said.