Please ensure Javascript is enabled for purposes of website accessibility

Why Vipshop Holdings Stock Popped Today

By Evan Niu, CFA - Mar 5, 2020 at 1:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese e-commerce company reported fourth-quarter results and warned of near-term coronavirus impacts.

What happened

Shares of Vipshop Holdings (VIPS 1.00%) have popped today, up by 17% as of 11:30 a.m. EST, after the company reported fourth-quarter earnings. The results topped expectations and the Chinese e-commerce specialist warned that the coronavirus outbreak would impact the first quarter.

So what

Revenue in the fourth quarter increased 12% to $4.2 billion, ahead of the $4 billion in sales that the market was expecting. That translated into adjusted net income of $277.4 million, or $0.41 per share. Analysts were modeling for just $0.29 per share in adjusted profits. Gross merchandise value (GMV) increased 14% to 47.6 billion yuan ($6.9 billion).

Chinese woman holding credit card and looking at her smartphone

Image source: Getty Images.

"We are delighted to have finished the year of 2019 with strong financial results and operating performance," CEO Eric Shen said in a statement. "Specifically, our total active customers for the fourth quarter of 2019 maintained a robust year-over-year growth rate of 19%, and our annual active customers for the year of 2019 reached 69.0 million."

Now what

Vipshop recently granted Shen and COO Arthur Hong options to purchase 2.7 shares each at a strike price of $13.37 per American depositary share (ADS), with the grants vesting over six years.

The company said that the ongoing novel coronavirus epidemic would impact its results in the first quarter. Revenue is expected to decline by 15% to 20% to 17.1 billion yuan to 18.1 billion yuan ($2.5 billion to $2.6 billion) due to the outbreak. Shen added, "Although our business is experiencing some short-term impact from the novel coronavirus outbreak, we are fully confident in the long-term potential of the Chinese economy and the growth opportunities in China's discount retail segment."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vipshop Holdings Limited Stock Quote
Vipshop Holdings Limited
$11.11 (1.00%) $0.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.