Vipshop Holdings Swings To Q3 Profit

(RTTNews) - Vipshop Holdings Ltd. (VIPS) Monday reported a swing to profit in the third quarter, as revenues surged and margins strengthened. Both earnings and revenues for the quarter came in ahead of analysts' estimates. Moving ahead, the Chinese online retailer guided its third-quarter revenue outlook above current Wall Street expectations.

Guangzhou, China-based Vipshop's third-quarter profit was $12.0 million compared to a loss of $1.5 million last year. On a per-ADS basis, earnings were $0.21, compared to a loss of $0.03 per share a year ago.

Adjusted earnings for the quarter were $0.26 per ADS compared to $0.01 per ADS last year. On average, four analysts polled by Thomson Reuters expected earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.

Vipshop's revenues for the third quarter surged 146.1 percent to $383.7 million from $155.9 million last year. Analysts expected revenues of $364.65 million for the quarter.

The company attributed the revenue growth to a 131.7 percent increase in the number of active customers from 1.7 million to 4.0 million and a 115.6 percent increase in total orders from 5.4 million to 11.7 million over the prior year period.

Vipshop Holdings, which operates e-commerce site vipshop.com, offers branded products to consumers in China through flash-sale format, i.e. offering limited quantity of branded products for a limited period of time. The flash sale format drives consumer interest but at same time keeps inventory and operating costs low for the retailer.

Third-quarter gross margin increased to 24.2 percent from 22.3 percent a year ago.

Looking ahead, the company has forecast fourth-quarter revenues in a range of $580 million to $590 million. Analysts currently expect revenues of $532.64 million for the fourth quarter.

VIPS closed Monday's regular trade at $73.32, down $1.56 or 2.08%, on the Nasdaq. The stock, however, gained $0.82 or 1.12%, in after-hours trade.