Baozun (BZUN -3.65%) reported first-quarter results before the market opened on Tuesday, delivering sales and earnings that topped the market's targets. Revenue climbed 18.4% year over year on a local currency basis to hit roughly 1.52 billion yuan -- or approximately $215.2 million. The average analyst estimate had called for revenue of $204.5 million for the quarter.
Baozun posted non-GAAP (adjusted) net income of 26 million yuan -- working out to earnings of roughly $0.06 per share, which topped the average target for per share earnings of $0.02. The e-commerce player paired the earnings beat with guidance suggesting that sales growth would accelerate in the current quarter, helping to push its share price up roughly 10% on the day as of this writing.
What's next for Baozun investors?
Baozun is guiding for second-quarter sales to come in between $2.05 billion yuan and $2.1 billion yuan, suggesting year over year growth between 20% and 23%. Management anticipates strong sales growth for its services segment in the current quarter and tailwinds as China's economy recovers from the impact of the novel coronavirus. After a challenging stretch, the company's first-quarter report and conference call brought some welcome good news.
Baozun has been pressured amid the novel coronavirus pandemic and reignited tensions between the U.S. and China. The U.S. Senate recently passed a bill that could eventually result in Chinese companies being delisted from U.S. exchanges if they don't pass heightened regulatory standards. Baozun's focus on helping Western brands build their e-commerce presence in China looks riskier at present as a result. The company has major growth potential, and it still managed to add eight new brand partners last quarter, but bullish investors will have to accept elevated levels of uncertainty.