VIPS

Image source: The Motley Fool. Tuesday, Aug. 25, 2026 at 7:30 a.m. ET Head of Investor Relations - Jessie Zheng Co-Founder, Chairman and Chief Executive Officer - Eric Shen Chief Financial Officer - Mark Wang Operator: Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed. Jessie Fan: Thank you, operator. Hello, everyone, and thank you for joining Vipshop's Second Quarter 2026 Earnings Conference Call. With us today are Eric Shen, our Co-Founder, Chairman and CEO, and Mark Wang, our CFO. Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in our safe harbor statement in our earnings release and public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made. Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop's shareholders and non-GAAP net income per ADS are not presented in accordance with U.S. GAAP, please refer to our earnings release for details relating to the reconciliation of our non-GAAP measures to GAAP measures. With that, I would now like to turn the call over to Mr. Eric Shen. Eric Shen: Good morning and good evening, everyone. Welcome, and thank you for joining our second quarter 2026 earnings conference call. The second quarter presents a challenging retail environment defined by a customer who is not just value conscious, but highly selective across the [ multi midyear ] promotional landscape. Shoppers will intensely focus on clear utility and real value, prioritize essentials, meeting great cautions in discretionary categories like apparel, weighing on our near-term top line performance in this climate rather than chasing unprofitable value growth, we stayed true to our core value proposition, delivering a highly curated selection of high demand, deeply discounted brand products to our loyal customer base. While overall traffic was muted, our SVIP cohort served as a resilient anchor for our business. During the quarter, active SVIP grew by 8% year-over-year, driving 54% of our online spending, showing that as customers' budgets tightened, high-intent shoppers prioritized platform, offering trust, value, quality and service. At a strategic level, our 1P model gives us a differentiated edge by leveraging deep category expertise, we built greater trust with brand partners to the point where they actively adjust their merchandise allocation for our platform. For instance, closer collaborations with key partners in fashion apparel has helped buffer against the broad market [ weakness ]. This level of brand integration strength our moat and protect our core business. On top of this, our merchandising team has been moving quickly to align our product mix with more selective customers. We have sharpened our [indiscernible] along the core apparel and lifestyle essentials, matching our assortment to real life occasions to capture immediate demand. This targeted approach ensures that we always deliver a clear utility, recognized brand and compelling value. Our opportunistic sourcing strategy adds another layer of inventory flexibility as brand partners manage inventory in a softer market, we serve as a reliable off-price partner, locking in unique high-demand inventory at deep discounts. This reinforced our differentiated merchandise pipeline and fosters deep brand collaboration. At the same time, we continue to advance the repositioning of our exclusive Made for Vipshop line to drive stronger customer mind share and loyalty by raising product standard and aligning the seasonal launch closely with brand partners, we are seeing high quality halo products emerging [ likely ] conversion rate and support overall portfolio stability. As we kick off the upcoming season, we are pleased to see that our SVIP membership has hit the 10 million milestone. To continue the momentum, we have launched an integrated campaign paired with full collection and major upgrades to provide sales. At the core of this push, we have refreshed our signature slogan, dress the best for 70% less, which has long resonated deeply with our loyal base. To ensure we keep evolving alongside the modern Chinese shopper, we are refreshing our campaign reach to both younger and mature demographic while reinforcing enduring truth across every market cycle that shoppers consistently demand great high-quality fashion at unbeatable prices, grounding our mind share in smart value allowing us to double down on our off-price advantage, attract high-value shoppers and drive high-quality growth. Alongside our branding refresh, our customer engagement strategy focused on retention and lifetime value. The 70% less saving power our core apparel, delivering [ unprecedented ] price affordability that convince new shoppers, providing a tailored tiered service model to our SVIP allowing us to capture greater wallet share over time, making SVIP loyalty as a primary engine of operational stability and profitable growth. Turning to our technology road map. We are deepening AI integration across our business. On the customer side, our AI product suite is driving tangible results. [indiscernible] is steadily up. Integrate intelligent customer service with AI voice interactions and predictive capabilities is lifting conversion rate and AIGC has enabled faster discovery. Marketing remains our most impactful [ upgrade ] to date. Our upgrade AI marketing agent now enable optimized from placement planning to AIGC creative matching across the right channels. We see clear room for this integrated approach to further drive acquisition efficiency while improving customer quality. Operationally, we are scaling AI beyond individual tools into a unified secured intelligence layer across the business. We are already seeing early wins in supply chains, optimizations and daily operational workflows. Overall, we remain focused on disciplined execution today while building towards our long-term vision. While we continue to navigate near-term macro headwinds with caution, I have full confidence in our proven model, solid foundations and team. As we sharpen our merchandising, elevate the customer experience and scale technology, we are firmly positioned on our path back to sustainable growth. Finally, I would like to briefly cover Shan Outlets, a key part of our omnichannel discount retail strategy. Since our acquisitions in 2019, we have driven disciplined expansion across emerging Tier 1, Tier 2 and the key cities. Today, Shan has scaled from 5 to 22 operational outlets mall, becoming China's largest outlet chain by store count and maintain a top-tier position by total GMV. In the first half, Shan Outlets continued its strong scale momentum with over 20% year-over-year growth, capitalizing on the value-seeking trend and the unique in-person shopping experience of online -- off-line retail. Looking ahead, we expect its business contributions to the group to increase steadily. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Mark Wang: Thanks, Eric, and hello, everyone. In the second quarter, our top line came in at the lower end of our guided range, reflecting broad-based softening in consumer sentiment. Despite ongoing pressure, we maintained disciplined execution, which provides strong visibility into our operational trajectory, enabling us to preserve core operating profitability and margin health. As noted in our earnings release, our non-GAAP net income was temporarily impacted by a onetime withholding tax adjustment, which I will elaborate on shortly. Adjusting for this nonrecurring item, our underlying non-GAAP net profit remains solid with RMB 2.0 billion with a net margin of 7.9%, demonstrating our underlying profitability and the core cash generation remains fully intact. As Eric mentioned, quality, sustainable growth remains our core priority. While macro headwinds persist, we continue to focus on strengthening our competitive moat and strategically reinvesting to fortify our fundamentals for profitable and long-term expansion. During the first half, we distributed approximately USD 400 million to shareholders through a combination of cash dividends and share repurchases, reflecting the anticipated utilization of our existing authorization. The Board of Directors has approved a new USD 1 billion share repurchase program. This underscores our firm commitment to returning no less than 75% of our full year 2025 non-GAAP net income to shareholders, supported by solid business fundamentals and a resilient underlying cash generation. We remain fully confident in our capacity to achieve this capital return target. In addition, to unlock the value of our high-quality assets and optimize capital efficiency, we successfully launched 2 public REITs backed by 3 mature Shan outlet properties, a consumer infrastructure REIT and a commercial REIT. This not only improves the quality of our outlet portfolio and the market valuation, but also creates a capital recycling loop that allows us to reinvest the proceeds from mature assets directly into disciplined expansion. We believe this model maintains our financial flexibility, while supporting the sustainable growth of our outlet business, driving asset revaluation and creating sustainable value for our shareholders. Now moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented below are in renminbi and all percentage change a year-over-year change unless otherwise noted. Total net revenues for the second quarter of 2026 were RMB 24.7 billion compared with RMB 25.8 billion in the prior year period. Gross profit was RMB 5.8 billion compared with RMB 6.1 billion in the prior year period. Gross margin was 23.3% compared with 23.5% in the prior year period. Total operating expenses decreased by 2.4% year-over-year to RMB 4.5 billion from RMB 4.6 billion in the prior year period. As a percentage of total net revenues, total operating expenses were 18.0% compared with 17.7% in the prior year period. Fulfillment expenses were RMB 2.14 billion compared with RMB 2.11 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 8.7% compared with 8.2% in the prior year period. Marketing expenses were RMB 760.3 million compared with RMB 715.9 million in the prior year period. As a percentage of total net revenues, marketing expenses were 3.1% compared with 2.8% in the prior year period. Technology and content expenses were RMB 486.2 million compared with RMB 442.0 million in the prior year period. As a percentage of total net revenues, technology and content expenses were 2.0% compared with 1.7% in the prior year period. General and administrative expenses decreased by 17.5% year-over-year to RMB 1.1 billion compared with RMB 1.3 billion in the prior year period, primarily due to higher share-based compensation expenses for Shan Outlets recorded in the prior year period. As a percentage of total net revenues, general and administrative expenses decreased to 4.3% from 5.0% in the prior year period. Income from operations was RMB 1.5 billion compared with RMB 1.7 billion in the prior year period. Operating margin was 6.2% compared with 6.6% in the prior year period. Non-GAAP income from operations was RMB 2.0 billion compared with RMB 2.4 billion in the prior year period. Non-GAAP operating margin was 8.1% compared with 9.3% in the prior year period. Income tax expenses were RMB 3.3 billion compared with RMB 407.2 million in the prior year period. The increase was primarily driven by 2 items: The first one is the income tax expense of RMB 1.63 billion relating to the one-off investment gain recognized by Shan Commercial Group, the original holder of the underlying assets, upon the issuance of commercial REIT, and the second one is accrued withholding tax expense of RMB 1.56 billion reflecting the withholding tax treatments of historical dividend distributions from Mainland China to Hong Kong regarding applicable policies on tax treaty benefits. Excluding the tax impact of this [indiscernible] and nonoperating items, the company's normalized the effective tax rate for the second quarter of 2026 remained stable year-over-year. Here, I would like to emphasize that our company has always operated and continues to operate in full compliance with applicable tax laws and regulatory guidelines. The withholding tax adjustment reflects adjustments of historical dividend distributions and expected to be settled in the third quarter. Going forward, the company will continue to accrue dividend withholding tax at the [indiscernible] for any onshore earnings allocated for offshore repatriation. This will increase the cost of direct onshore to offshore equity remittance. With this cash repatriation [indiscernible] in our broader capital structure [ toolkit ]. Net income attributable to Vipshop's shareholders increased by 189.1% year-over-year to RMB 4.3 billion from RMB 1.5 billion in the prior year period, primarily due to a one-off investment gain of RMB 5.79 billion from the listing of a commercial REIT. Net margin attributable to Vipshop's shareholders increased to 17.4% from 5.8% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS increased to RMB 8.82 from RMB 2.91 in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders was RMB 392.2 million compared with RMB 2.1 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders was 1.6% compared with 8.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS was RMB 0.80 compared with RMB 4.06 in the prior year period. As of June 30, 2026, the company has cash and the cash equivalents and restricted cash of RMB 29.9 billion and short-term investments of RMB 3.6 billion. Looking forward to the third quarter of 2026, we expect our total net revenues to be between RMB 20.3 billion and RMB 21.4 billion, representing a year-over-year decrease of approximately 5% to 0%. Please note that these forecasts reflect our current and preliminary view of the market and operational conditions, which is subject to change. With that, I would now like to open the call to Q&A. Operator: [Operator Instructions] The first question will come from the line of Thomas Chong of Jefferies. Thomas Chong: My question is about the consumer sentiment. Can management comment about how we are seeing the sentiment so far? And on that front, can you comment about the monthly revenue trend that we are seeing since April till now. Given that we are already like 2 months in the quarter, are we actually seeing our revenue hitting the low end or the high end of the guidance? And finally, can management comment about the second half outlook? Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] Okay. In terms of the general consumer sentiment, we find consumers are not particularly enthusiastic. They are actually not buying into everything. They are very value seeking, and they're very budget-conscious, and they're very selective. So as we enter into Q3, across our sector, we continue to observe pressure quarter-to-date from July to August. So we do see some recovery in terms of sales momentum, but it's only slightly better. It's far from being good. So that's why we think that for the second half and for the full year, we may see a similar consumer sentiment as we have seen in the first half. That will bring our total revenue for the full year to be slightly negative from last year. Operator: Our next question will come from the line of Alicia Yap of Citigroup. Alicis a Yap: [Foreign Language] I have a question on the operating income. We noticed that it seems that there is -- the operating margin seems to be declining on a year-over-year trend. How should we be thinking about the gross margins, operating expenses and also operating margin trends for the third quarter and the fourth quarter? Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] In terms of operating margin, we do see a slight decline year-over-year for Q2 that's primarily because we see certain level of deleverage from fulfillment expenses, which is increasing proportionately as return rates are still going up. Actually, when we look at our GP margin, it's flattish and it's even growing, which implies that we have a strong management on managing the gross margin and the gross profit. In addition, we do see certain operating [ leverage ] from fixed cost and expenses as the revenue scale become smaller due to macro pressure. But overall, we expect operating margin will continue to be quite resilient given our structural cost and expense discipline. So for the second half for Q3 and Q4, we are pretty confident in managing the structural health of our business. And as you look externally, you see a lot of the industry players actually investing in unprofitable subsidies. That's not what we are going to do. Our focus remains steadfastly on maintaining a healthy level of profitability and margin. So we do expect our margins, especially the NP margins will remain relatively stable for the second half Operator: The next question will come from the line of Vicky Wu of CICC. Weijia Wu: [Foreign Language] We've noticed an adjustment regarding the withholding part this quarter. Could management elaborate more on the reasons for this? And is this a result of a penalty imposed by the tax authority? Looking ahead, will this affect your plans for share buybacks and dividend payouts? Mark Wang: Okay. Thanks for your question. I am Mark. First of all, this is absolutely not. It's not a penalty. And the company is and has always been in full compliance with applicable tax laws and regulatory guidelines. And this adjustment represents a prudent step in the company's continuous enhancement of its compliance framework. Through a proactive reassessment aligned with prevailing best practice, we are mitigating compliance risk and providing greater tax certainty. This is not a compliance finding or penalty. And withholding tax on dividend is a transaction cost associated with capital mobility, not an operational expense. Our core operating margin and pretax cash flows remain fully intact. The company maintains multiple avenues to optimize offshore liquidity and the cash repatriation is just one of them. Accordingly, we anticipate an impact on our future net margin to be minimal. The company remains fully committed to our long-term shareholder return promise. Thank you. Operator: The next questions will come from the line of Sardonna Fong from UBS. Sardonna Fong: [Foreign Language] I will translate myself. So congrats on the strong Shan 2Q GMV growth performance of over 20%. What's management's outlook for the second half? And now that the 2 REITs have already completed their listing, what would be the pace of progress on the securitization of the remaining outlet projects that management can share? And lastly, on shareholder return, I noted that the company resumed buybacks in the second quarter and management also announced a new buyback program in August of USD 1 billion. How should we think about the level and pace of shareholder returns for the second half? Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] We are quite optimistic about Shan Outlets' growth momentum. In the first half, Shan Outlets grew by over 20% in terms of GMV. Actually, the first quarter turned out to be much better and followed by a very decent second quarter given the general soft consumer sentiment today. We continue to expect a similar growth momentum for the second half. And we do believe that over 20% GMV growth is completely achievable. And actually, we have higher standards for comparable same-store sales for the existing Shan Outlets, which we believe will grow at least double digits. Mark Wang: Okay, Mark. And let me answer your second and third questions. Your second question is regarding the REIT status [indiscernible]. Well, on June 18, 2026, we successfully listed our commercial REIT on the Shanghai Stock Exchange. And the listing makes a significant strategic milestone for Vipshop, expanding our presence from customer -- from consumer infrastructure REIT into the broader commercial REIT arena. And the REIT with a total of RMB 7.7 billion, making the largest commercial REIT in terms of the fundraising scale among the first batch of commercial REIT listed on China's capital markets. There are 2 underlying assets, Shan Outlets in Zhengzhou and Harbin in the commercial REIT, both mature outlets operating for around 10 years. Both outlets hold leading positions in their regional markets. The Zhengzhou outlet is the highest gross profit outlets in Henan province, while the Harbin outlet ranks first in Heilongjiang province. In addition to the 3 outlets already used as underlying assets for the REIT issuance, we also hold another 18 outlet projects, demonstrating strong potential for future expansion. We will conduct future evaluation based on our strategy and the market conditions. And your third question is regarding the buyback. Well, during the 2021 to 2025, we have already returned USD 3.7 billion to shareholders. Our long-term returns to shareholders is built on our strong business model and healthy cash flow. External factors may cause short-term volatility in our business. Our core operations manage to deliver stable and robust profitability across economic cycles. This [indiscernible] lets us keep providing sustainable returns to our shareholders over time. For 2026, we remain fully committed to our full year shareholder return policy, which targets total payout ratio of no less than 75% of our 2025 non-GAAP net income. And in first half, we have distributed approximately USD 400 million through dividend and buyback. Reflecting the anticipated utilization of our existing authorization, the Board of Directors have approved a new USD 1 billion share repurchase program. We will continue the buyback opportunistically in the quarters ahead. Operator: Due to time constraints, that concludes today's Q&A session. At this time, I will turn the conference back to Jessie for any closing remarks. Jessie Fan: Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter. Operator: That concludes today's conference call. Thank you for your participation, and you may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.] Before you buy stock in Vipshop, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vipshop wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Vipshop (VIPS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Total Net Revenues: RMB24.7 billion in Q2 2026, compared with RMB25.8 billion in the prior year period. Gross Profit: RMB5.8 billion, compared with RMB6.1 billion in the prior year period. Gross Margin: 23.3%, compared with 23.5% in the prior year period. Total Operating Expenses: Decreased by 2.4% year-over-year to RMB4.5 billion, representing 18.0% of total net revenues. Fulfillment Expenses: RMB2.14 billion, compared with RMB2.11 billion in the prior year period; 8.7% of total net revenues. Marketing Expenses: RMB760.3 million, compared with RMB715.9 million in the prior year period; 3.1% of total net revenues. Technology and Content Expenses: RMB486.2 million, compared with RMB442.0 million in the prior year period; 2.0% of total net revenues. General and Administrative Expenses: Decreased by 17.5% year-over-year to RMB1.1 billion, representing 4.3% of total net revenues. Income from Operations: RMB1.5 billion, compared with RMB1.7 billion in the prior year period; operating margin of 6.2%. Non-GAAP Income from Operations: RMB2.0 billion, compared with RMB2.4 billion in the prior year period; non-GAAP operating margin of 8.1%. Net Income Attributable to Vipshop Shareholders: Increased by 189.1% year-over-year to RMB4.3 billion, primarily due to a one-off investment gain from the listing of a commercial REIT. Non-GAAP Net Income Attributable to Vipshop Shareholders: RMB392.2 million, compared with RMB2.1 billion in the prior year period; non-GAAP net margin of 1.6%. Underlying Non-GAAP Net Profit (excluding one-time withholding tax adjustment): RMB2.0 billion, with a net margin of 7.9%. Cash and Cash Equivalents and Restricted Cash: RMB29.9 billion as of June 30, 2026. Short-term Investments: RMB3.6 billion as of June 30, 2026. Active SVIP Growth: Increased by 8% year-over-year, driving 54% of online spending. Shan Shan Outlets: Scaled from five to 22 operational outlet malls; over 20% year-over-year growth in the first half. Q3 2026 Revenue Guidance: Expected between RMB20.3 billion and RMB21.4 billion, representing a year-over-year decrease of approximately 5% to 0%. Is VIPS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 25, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SVIP membership grew 8% year-over-year, driving 54% of online spending, showing strong loyalty and resilience. Shan Shan Outlets achieved over 20% GMV growth in the first half, with expectations of continued double-digit same-store sales growth. Successful listing of two REITs, including the largest commercial REIT in China, creating a capital recycling loop for expansion. New $1 billion share repurchase program and commitment to return at least 75% of 2025 non-GAAP net income to shareholders. Gross margin remained stable at 23.3%, with disciplined cost management and a focus on profitable growth rather than unprofitable subsidies. Total net revenues declined 4.3% year-over-year to RMB24.7 billion, reflecting broad-based softening in consumer sentiment. Non-GAAP net income dropped significantly to RMB392.2 million from RMB2.1 billion, impacted by a one-time withholding tax adjustment. Operating margin declined to 8.1% from 9.3% year-over-year, partly due to deleverage from higher fulfillment expenses and rising return rates. Third-quarter revenue guidance indicates a year-over-year decrease of up to 5%, with management expecting similar consumer sentiment in the second half. The withholding tax adjustment of RMB1.56 billion increases the cost of future dividend repatriation, potentially affecting capital allocation flexibility. Q: Can management comment on the current consumer sentiment and the monthly revenue trend since April? Are we seeing revenue hitting the low or high end of the guidance, and what is the outlook for the second half? A: Eric Shen (Co-founder, Chairman & CEO) noted that consumers are not enthusiastic and are highly value-seeking, budget-conscious, and selective. Pressure has continued into Q3 (July-August), with only a slight recovery in sales momentum. Management expects similar consumer sentiment in the second half, leading to full-year total revenue being slightly negative year-over-year. Q: Can you elaborate on the reasons for the withholding tax adjustment this quarter? Is it a penalty, and will it affect future share buybacks and dividend payouts? A: Mark Wang (CFO) clarified that this is absolutely not a penalty. The company remains in full compliance with tax laws. The adjustment is a proactive step to enhance its compliance framework and mitigate risk, reflecting the withholding tax treatment of historical dividend distributions from mainland China to Hong Kong. It is a transaction cost, not an operational expense. The company maintains multiple avenues for offshore liquidity, so the impact on future net margin will be minimal, and the commitment to long-term shareholder returns remains unchanged. Q: What is the outlook for Shan Shan Outlets' growth in the second half? What is the pace of securitization for remaining outlet projects, and how should we think about the level and pace of shareholder returns? A: Management is optimistic about Shan Shan Outlets, expecting over 20% GMV growth in the second half, with same-store sales growing at least double digits. Mark Wang (CFO) added that after listing the commercial REIT (raising RMB7.7 billion), they hold 18 other outlet projects with strong expansion potential. On shareholder returns, the company remains committed to a payout ratio of no less than 75% of 2025 non-GAAP net income. After distributing ~USD400 million in H1, the Board approved a new USD1 billion buyback program to be executed opportunistically. Q: The operating margin declined year-over-year. How should we think about gross margin, operating expenses, and operating margin trends for Q3 and Q4? A: Jessie Zheng (Head of IR) explained that the slight decline in operating margin is due to deleverage from fulfillment expenses as return rates rise. However, gross profit margin is flattish or growing, reflecting strong management. The company expects operating margins to remain resilient due to structural cost discipline. Unlike industry peers investing in unprofitable subsidies, Vipshop will maintain a healthy profitability level, with net profit margins expected to remain relatively stable in the second half. Q: How is the company leveraging its 1P model and brand partnerships to navigate the challenging retail environment? A: Eric Shen (CEO) highlighted that the 1P model provides a competitive edge by building deep trust with brand partners, who adjust merchandise allocations for Vipshop. This integration buffers against market weakness. The opportunistic sourcing strategy locks in unique, high-demand inventory at deep discounts, reinforcing the differentiated merchandise pipeline and strengthening the company's moat. Q: What is the progress on the SVIP membership and its impact on the business? A: Eric Shen (CEO) noted that SVIP membership hit a 10 million milestone. During Q2, active SVIP grew 8% year-over-year and drove 54% of online spending. This cohort serves as a resilient anchor, as high-intent shoppers prioritize platforms offering trust, value, quality, and service, making SVIP loyalty a primary engine of operational stability and profitable growth. Q: How is the company integrating AI across its operations, and what results are being seen? A: Eric Shen (CEO) stated that AI integration is deepening across the business. On the customer side, virtual try-on, intelligent customer service with AI voice interactions, and AIGC are lifting conversion rates. Marketing is the most impactful use case, with an upgraded AI marketing agent optimizing placement and creative matching. Operationally, AI is being scaled into a unified intelligence layer, showing early wins in supply chain optimization and daily workflows. Q: Can you provide details on the financial performance for Q2 2026, including the impact of the one-off items? A: Mark Wang (CFO) reported total net revenues of RMB24.7 billion, down from RMB25.8 billion. Gross profit was RMB5.8 billion with a 23.3% margin. Non-GAAP net income was temporarily impacted by a one-time withholding tax adjustment. Excluding this, underlying non-GAAP net profit was RMB2.0 billion with a 7.9% net margin. Net income attributable to shareholders increased 189.1% to RMB4.3 billion, primarily due to a one-off investment gain of RMB5.79 billion from the commercial REIT listing. Q: What is the revenue guidance for the third quarter of 2026? A: Mark Wang (CFO) guided Q3 2026 total net revenues to be between RMB20.3 billion and RMB21.4 billion, representing a year-over-year decrease of approximately 5% to 0%. This forecast reflects the current preliminary view of the market and operational conditions, which is subject to change. Q: How is the company refreshing its brand and customer engagement strategy to drive growth? A: Eric Shen (CEO) mentioned a refresh of the signature slogan "dress the best for 70% less" to reach both younger and mature demographics. The customer engagement strategy focuses on retention and lifetime value, using the "70% less" saving power to deliver pleasant surprises that convince new shoppers and capture greater wallet share from SVIP members over time. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Vipshop Holdings Limited? Here are five stocks we like better. Revenue and operating profit declined amid cautious, value-focused consumers: Q2 net revenue fell 4.3% year over year to RMB24.7 billion, while operating income dropped to RMB1.5 billion. Management expects full-year revenue to be slightly below 2025 levels. Reported net income surged 189% to RMB4.3 billion because of a one-time RMB5.79 billion REIT-related investment gain, while non-GAAP net income fell sharply due partly to a withholding-tax adjustment. Excluding discrete tax items, underlying non-GAAP net profit was about RMB2.0 billion. Vipshop is prioritizing profitability, customer retention and capital returns over aggressive promotions, supported by an 8% increase in active SVIP customers and a new $1 billion buyback program. It forecast Q3 revenue of RMB20.3 billion to RMB21.4 billion, down approximately 5% to flat year over year. Vipshop (NYSE:VIPS) reported lower second-quarter revenue and operating profit as management cited a challenging retail environment in which consumers remained highly selective and focused on value. The company said it is prioritizing profitability, curated merchandise and customer retention rather than pursuing unprofitable growth. Total net revenue for the second quarter of 2026 was RMB24.7 billion, down from RMB25.8 billion a year earlier. Gross profit declined to RMB5.8 billion from RMB6.1 billion, while gross margin was 23.3%, compared with 23.5% in the prior-year period. → Rocket Lab's Sell-Off Is Fading—Is It Finally Safe to Buy? Income from operations fell to RMB1.5 billion from RMB1.7 billion, and operating margin narrowed to 6.2% from 6.6%. Non-GAAP income from operations was RMB2.0 billion, compared with RMB2.4 billion a year earlier, with non-GAAP operating margin declining to 8.1% from 9.3%. Co-founder, Chairman and CEO Eric Ya Shen said the quarter was marked by customers who were “value conscious” and highly selective across promotional channels. Shoppers were prioritizing essential purchases and exercising greater caution in discretionary categories such as apparel, he said. → Travel + Leisure Goes Big—Is It Ready to Rally? Rather than chase sales through unprofitable promotions, Shen said Vipshop remained focused on its off-price model of selling curated branded merchandise at deep discounts. He pointed to the company’s Super VIP, or SVIP, members as a source of resilience: Active SVIP customers increased 8% year over year and accounted for 54% of online spending during the quarter. Vipshop said its SVIP membership base has reached 10 million. Management plans to support member engagement with seasonal campaigns, a service upgrade and a refreshed version of its “Dress the best for 70% less” slogan. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects In response to a softer demand environment, Shen said the company has sharpened its merchandise curation around apparel and lifestyle essentials and has worked more closely with brand partners on inventory allocations. Vipshop also continues to reposition its Made-for-Vipshop exclusive product line, seeking to improve product standards, conversion rates and customer loyalty. During the question-and-answer session, Head of Investor Relations Jessie Zheng said consumer enthusiasm has remained limited through July and August, although sales momentum has shown a slight recovery. She said the improvement remained far from strong and that management expects consumer sentiment in the second half to resemble conditions seen in the first half. As a result, the company expects full-year revenue to be slightly below the prior year. Net income attributable to Vipshop shareholders rose 189.1% year over year to RMB4.3 billion, primarily because of a RMB5.79 billion one-time investment gain related to the listing of a commercial real estate investment trust, or REIT. Net income per diluted ADS increased to RMB8.82 from RMB2.91. Non-GAAP net income attributable to Vipshop shareholders was RMB392.2 million, down from RMB2.1 billion a year earlier. Non-GAAP net income per diluted ADS was RMB0.80, compared with RMB4.06 in the prior-year period. CFO Mark Wang said non-GAAP income was temporarily affected by a one-time withholding-tax adjustment. Excluding discrete, non-operating tax items, Wang said underlying non-GAAP net profit was RMB2.0 billion and the associated net margin was 7.9%. Income tax expense increased to RMB3.3 billion from RMB407.2 million. Wang attributed the increase primarily to RMB1.63 billion in tax expense related to the one-time investment gain recognized by Shan Shan Commercial Group upon issuance of a commercial REIT, as well as RMB1.56 billion of accrued withholding tax associated with historical dividend distributions from mainland China to Hong Kong. Responding to an analyst question, Wang said the withholding-tax adjustment was “absolutely not a penalty” and stated that the company has operated in compliance with applicable tax laws and regulatory guidance. He said the adjustment is expected to be settled in the third quarter and that Vipshop expects a minimal effect on future net margin. Vipshop’s operating expenses declined 2.4% to RMB4.5 billion, but rose as a percentage of revenue to 18.0% from 17.7%. Fulfillment expenses increased to RMB2.14 billion, while marketing expenses increased to RMB760.3 million and technology and content expenses rose to RMB486.2 million. General and administrative expenses declined 17.5% to RMB1.1 billion. Zheng said operating-margin pressure reflected fulfillment-cost deleverage as return rates continued to rise, along with lower revenue scale. However, she said gross margin was broadly stable and that the company expects its margins, particularly net-profit margins, to remain relatively stable in the second half. Management said it does not intend to participate in unprofitable subsidy spending seen elsewhere in the industry. Shen also discussed expanded artificial-intelligence deployment across customer service, virtual try-on, marketing, supply-chain optimization and daily operational workflows. He said the company’s AI marketing tools are being used for placement planning and matching creative content to appropriate channels, with the aim of improving acquisition efficiency and customer quality. The company’s Shan Shan Outlet business, meanwhile, grew more than 20% year over year in gross merchandise value during the first half, according to management. Shen said the outlet chain has expanded from five malls at the time of its 2019 acquisition to 22 operating outlet malls and is now China’s largest outlet chain by store count. Management expects Shan Shan Outlet to sustain similar growth momentum in the second half, with GMV growth above 20% considered achievable and comparable same-store sales expected to increase by at least double digits. Vipshop had RMB29.9 billion in cash, cash equivalents and restricted cash as of June 30, along with RMB3.6 billion in short-term investments. During the first half, the company returned about $400 million to shareholders through dividends and share repurchases. The board approved a new $1 billion share-repurchase program. Wang said Vipshop remains committed to returning no less than 75% of its full-year 2025 non-GAAP net income to shareholders and will conduct repurchases opportunistically. For the third quarter, Vipshop forecast total net revenue of RMB20.3 billion to RMB21.4 billion, representing a year-over-year decline of approximately 5% to 0%. Vipshop Holdings Limited (NYSE:VIPS) is a leading online discount retailer in China, offering high-quality branded products at competitive prices through a time-limited, flash-sales model. The company provides consumers with access to a rotating selection of merchandise, combining the excitement of limited-time offers with curated brand partnerships to drive customer engagement and loyalty. Vipshop’s platform features a diverse range of product categories, including apparel, footwear, cosmetics, home furnishings, digital electronics and other lifestyle goods. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Vipshop Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Conference Call to Be Held at 7:30 A.M. U.S. Eastern Time on August 25, 2026 GUANGZHOU, China, Aug. 25, 2026 /PRNewswire/ -- Vipshop Holdings Limited (NYSE: VIPS), a leading off-price retailer in China ("Vipshop" or the "Company"), today announced its unaudited financial results for the quarter ended June 30, 2026. Second Quarter 2026 Highlights Total net revenues for the second quarter of 2026 were RMB24.7 billion (US$3.6 billion), compared with RMB25.8 billion in the prior year period. GMV[1] for the second quarter of 2026 was RMB50.6 billion, compared with RMB51.4 billion in the prior year period. Gross profit for the second quarter of 2026 was RMB5.8 billion (US$848.1 million), compared with RMB6.1 billion in the prior year period. Net income attributable to Vipshop's shareholders for the second quarter of 2026 increased by 189.1% year over year to RMB4.3 billion (US$634.7 million) from RMB1.5 billion in the prior year period, primarily due to a one-off investment gain of RMB5.79 billion from the listing of a commercial REIT. Non-GAAP net income attributable to Vipshop's shareholders[2] for the second quarter of 2026 was RMB392.2 million (US$57.8 million), compared with RMB2.1 billion in the prior year period, primarily due to a one-time withholding tax adjustment relating to certain historical dividend distributions. The number of active customers[3] for the second quarter of 2026 was 42.3 million, compared with 43.5 million in the prior year period. Total orders[4] for the second quarter of 2026 were 182.4 million, compared with 193.0 million in the prior year period. Mr. Eric Shen, Chairman and Chief Executive Officer of Vipshop, stated, "We navigated a challenging consumer environment in the second quarter by staying disciplined to our core value proposition — offering a curated selection of high-value branded products to our most loyal customers. The solid performance of our active SVIPs validated the enduring strength of our business model. Leveraging our proven foundation, we are actively strengthening our competitive moat by sharpening merchandising, elevating customer experience, and scaling AI across our operations. These focused initiatives position us firmly for sustainable, long-term growth." Mr. Mark Wang, Chief Financial Officer of Vipshop, further commented, "In the second quarter, our top-line performance stayed within our guided range, reflecting disciplined execution amid subdued consumer demand. We maintained a steadfast focus on margin health, which helped preserve operating profitability. During the first half, we returned approximately US$400 million to shareholders through dividends and share repurchases, and we remain on track to meet our full-year shareholder return target. Supported by solid operating fundamentals and strong cash generation to reinvest strategically, we are confident in our path toward profitable, long-term growth." Second Quarter 2026 Financial Results REVENUES Total net revenues for the second quarter of 2026 were RMB24.7 billion (US$3.6 billion), compared with RMB25.8 billion in the prior year period. GROSS PROFIT Gross profit for the second quarter of 2026 was RMB5.8 billion (US$848.1 million), compared with RMB6.1 billion in the prior year period. Gross margin for the second quarter of 2026 was 23.3%, compared with 23.5% in the prior year period. OPERATING EXPENSES Total operating expenses for the second quarter of 2026 decreased by 2.4% year over year to RMB4.5 billion (US$656.5 million) from RMB4.6 billion in the prior year period. As a percentage of total net revenues, total operating expenses for the second quarter of 2026 were 18.0%, compared with 17.7% in the prior year period. Fulfillment expenses for the second quarter of 2026 were RMB2.14 billion (US$315.1 million), compared with RMB2.11 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses for the second quarter of 2026 were 8.7%, compared with 8.2% in the prior year period. Marketing expenses for the second quarter of 2026 were RMB760.3 million (US$112.1 million), compared with RMB715.9 million in the prior year period. As a percentage of total net revenues, marketing expenses for the second quarter of 2026 were 3.1%, compared with 2.8% in the prior year period. Technology and content expenses for the second quarter of 2026 were RMB486.2 million (US$71.7 million), compared with RMB442.0 million in the prior year period. As a percentage of total net revenues, technology and content expenses for the second quarter of 2026 were 2.0%, compared with 1.7% in the prior year period. General and administrative expenses for the second quarter of 2026 decreased by 17.5% year over year to RMB1.1 billion (US$157.7 million), compared with RMB1.3 billion in the prior year period, primarily due to higher share-based compensation expenses for Shan Shan Outlets recorded in the prior year period. As a percentage of total net revenues, general and administrative expenses for the second quarter of 2026 decreased to 4.3% from 5.0% in the prior year period. INCOME FROM OPERATIONS Income from operations for the second quarter of 2026 was RMB1.5 billion (US$224.0 million), compared with RMB1.7 billion in the prior year period. Operating margin for the second quarter of 2026 was 6.2%, compared with 6.6% in the prior year period. Non-GAAP income from operations[5] for the second quarter of 2026, which excluded share-based compensation expenses, was RMB2.0 billion (US$295.7 million), compared with RMB2.4 billion in the prior year period. Non-GAAP operating margin[6] for the second quarter of 2026 was 8.1%, compared with 9.3% in the prior year period. INCOME TAX EXPENSES Income Tax Expenses for the second quarter of 2026 were RMB3.3 billion (US$491.8 million), compared with RMB407.2 million in the prior year period. The increase was primarily driven by (i) an income tax expense of RMB1.63 billion relating to the one-off investment gain recognized by Shan Shan Commercial Group Co., Ltd., the original holder of the underlying assets, upon the issuance of a commercial REIT, and (ii) an accrued withholding tax expense of RMB1.56 billion reflecting the withholding tax treatments of historical dividend distributions from mainland China to Hong Kong regarding applicable policies on tax treaty benefits. NET INCOME Net income attributable to Vipshop's shareholders for the second quarter of 2026 increased by 189.1% year over year to RMB4.3 billion (US$634.7 million) from RMB1.5 billion in the prior year period, primarily due to a one-off investment gain of RMB5.79 billion from the listing of a commercial REIT. Net margin attributable to Vipshop's shareholders for the second quarter of 2026 increased to 17.4% from 5.8% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS[7] for the second quarter of 2026 increased to RMB8.82 (US$1.30) from RMB2.91 in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders for the second quarter of 2026, which excluded (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment (gain) loss and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments, was RMB392.2 million (US$57.8 million), compared with RMB2.1 billion in the prior year period, primarily due to a one-time withholding tax adjustment relating to certain historical dividend distributions. Non-GAAP net margin attributable to Vipshop's shareholders[8] for the second quarter of 2026 was 1.6%, compared with 8.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS[9] for the second quarter of 2026 was RMB0.80 (US$0.12), compared with RMB4.06 in the prior year period. For the quarter ended June 30, 2026, the Company's weighted average number of ADSs used in computing diluted income per ADS was 488,098,800. BALANCE SHEET AND CASH FLOW As of June 30, 2026, the Company had cash and cash equivalents and restricted cash of RMB29.9 billion (US$4.4 billion) and short term investments of RMB3.6 billion (US$533.3 million). For the quarter ended June 30, 2026, net cash used in operating activities was RMB374.7 million (US$55.2 million), and free cash flow[10], a non-GAAP measurement of liquidity, was as follows: Share Repurchase Program During the quarter ended June 30, 2026, the Company repurchased US$99.1 million of its ADSs under its current US$1.0 billion share repurchase program adopted in February 2025, as amended (the "Existing Program"), which is effective through February 2027. As of June 30, 2026, the Company had an unutilized amount of US$216.9 million under the Existing Program. In addition, on August 20, 2026, the board of directors authorized a new share repurchase program under which the Company may repurchase up to US$1.0 billion of its American depositary shares or Class A ordinary shares for a 24-month period commencing from the full utilization of the Existing Program. The Company will implement its share repurchases in accordance with applicable rules and requirements under the Securities Exchange Act of 1934, as amended, and the Company's insider trading policy. The Company's board of directors will review the share repurchase programs periodically, and may authorize adjustment of their terms and size. The Company expects to fund the repurchases out of its existing cash balance. Recent Development In June 2026, the Company listed a closed-end commercial real estate securities investment fund in relation to two outlets operated by Shan Shan Outlets (the "Vipshop Commercial REIT") on the Shanghai Stock Exchange (fund code: 508603.SH). The Company subscribed for 49% of the units issued by the Vipshop Commercial REIT and deconsolidated the underlying entities holding the two outlets under U.S. GAAP. Upon the completion of the Vipshop Commercial REIT, the Company raised gross proceeds of approximately RMB7.70 billion. During the second quarter of 2026, the Company recognized an investment gain of RMB5.79 billion, with an associated income tax expense of RMB1.63 billion. Business Outlook For the third quarter of 2026, the Company expects its total net revenues to be between RMB20.3 billion and RMB21.4 billion, representing a year-over-year decrease of approximately 5% to 0%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which is subject to change. Exchange Rate The Company's business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi. This announcement contains currency translations of Renminbi amounts into U.S. dollars solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars are made at a rate of RMB6.7851 to US$1.00, the effective noon buying rate on June 30, 2026 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on June 30, 2026 or at any other rate. Conference Call Information The Company will hold a conference call on Tuesday, August 25, 2026 at 7:30 am U.S. Eastern Time, 7:30 pm Beijing Time to discuss the financial results. All participants wishing to join the conference call must pre-register online using the link provided below. Registration Link:https://register-conf.media-server.com/register/BI9c75c14882da41dfae0c983d6e126453 Once pre-registration has been completed, each participant will receive dial-in numbers and a unique access PIN via email. To join the conference, participants should use the dial-in details followed by the PIN code. A live webcast of the earnings conference call can be accessed at https://edge.media-server.com/mmc/p/qifrf6to. An archived webcast will be available at the Company's investor relations website at http://ir.vip.com. About Vipshop Holdings Limited Vipshop Holdings Limited is a leading off-price retailer in China. Vipshop offers high-quality and popular branded products to consumers throughout China at deep discounts through diverse online and offline channels. Since its founding in 2008, the Company has built a large and loyal customer base and extensive brand partnerships. For more information, please visit https://ir.vip.com/. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Vipshop's strategic and operational plans, contain forward-looking statements. Vipshop may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Vipshop's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Vipshop's goals and strategies; Vipshop's future business development, results of operations and financial condition; the expected growth of the off-price retailer market in China; Vipshop's ability to attract customers and brand partners and further enhance its brand recognition; Vipshop's expectations regarding needs for and market acceptance of flash sales products and services; competition in the discount retail industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Vipshop's filings with the SEC. All information provided in this press release is as of the date of this press release, and Vipshop does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Use of Non-GAAP Financial Measures The condensed consolidated financial information is derived from the Company's unaudited interim condensed consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that cash flows for the period presented and the detailed footnote disclosures required by Accounting Standards Codification 270, Interim Reporting ("ASC270") have been omitted. Vipshop uses non-GAAP net income attributable to Vipshop's shareholders, non-GAAP net income attributable to Vipshop's shareholders per diluted ADS, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net margin attributable to Vipshop's shareholders, and free cash flow, each of which is a non-GAAP financial measure. For the periods presented in this press release, non-GAAP net income attributable to Vipshop's shareholders is net income attributable to Vipshop's shareholders excluding (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment (gain) loss and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS is computed using non-GAAP net income attributable to Vipshop's shareholders divided by weighted average number of diluted ADS outstanding for computing diluted earnings per ADS. Non-GAAP income from operations is income from operations excluding share-based compensation expenses. Non-GAAP operating margin is non-GAAP income from operations as a percentage of total net revenues. Non-GAAP net margin attributable to Vipshop's shareholders is non-GAAP net income attributable to Vipshop's shareholders as a percentage of total net revenues. Free cash flow is net cash from operating activities adding back the impact from internet financing activities and less capital expenditures, which include purchase and deposits of property and equipment and land use rights. Impact from internet financing activities added back or deducted from free cash flow contains changes in the balances of financial products, which are primarily consumer financing and supplier financing that the Company provides to customers and suppliers. The Company believes that separate analysis and exclusion of the non-cash impact of (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment (gain) loss and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting, and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of (i) share-based compensation expenses, (ii) impairment loss of investments, (iii) investment (gain) loss and revaluation of investments excluding dividends, (iv) reconciling items on the share of equity method investments, and (v) tax effects on non-GAAP adjustments. Free cash flow enables the Company to assess liquidity and cash flow, taking into account the impact from internet financing activities and the financial resources needed for the expansion of technology platform, and Shan Shan Outlets. Share-based compensation expenses have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. One of the key limitations of free cash flow is that it does not represent the residual cash flow available for discretionary expenditures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Vipshop Holdings Limited Reconciliations of GAAP and Non-GAAP Results" at the end of this release. Investor Relations Contact Tel: +86 (20) 2233-0732Email: [email protected] View original content:https://www.prnewswire.com/news-releases/vipshop-reports-unaudited-second-quarter-2026-financial-results-302859133.html

Image source: The Motley Fool. Thursday, May 21, 2026 at 7:30 a.m. ET Chief Executive Officer — Eric Shen Chief Financial Officer — Mark Wang SVP, Finance — Jessie Fan Eric Shen: Good morning, and good evening, everyone. Welcome, and thank you for joining our first quarter 2026 earnings conference call. Our first quarter performance reflected a significant calendar-driven shift caused by the later Chinese New Year. This lead to a successful holiday surge in active that effectively pulled forward demand, resulting in the soft March. What is important to highlight is sustain the health of our customer base. Our holiday results was outstanding, driven by customers who actively sought out our seasonal collection and value promotions. This strength of that demand, especially in apparel confirms that we remain a top priority for their spending and gives us real confidence in their long-term resilience. Our customer metrics this quarter further prove that resilience. Total active customers showed positive momentum, led by our SVIP members who grew by 9% year-over-year. Their paid members accounting for 50% -- 55% of our online spending. We remain focused on the quality of our growth as we move further into the year. We are making steadily progress in how we optimize merchandising portfolio, engaged with customers and increased AI to reshift our price retail model. Since realigning our team last year, we are seeing the benefits of the faster, more fluid approach to merchandising by staying focused on customer relevance and deeping category expertise, we will be able to move from market insights to product on shelf more quickly ensure our deep discount brand inventory hits when demand peaks. We are also driven better cross-category engagement as we create our selection along the broad needs of our customers and develop more effective and analytics editing tools for brand partners. We are helping shopper cost tale Hello, Cedar and Home category. Following our last update, we have transitioned our made 4 VIP line into the new phase of Globe by reading the bar for quality, stick and value. At the same time, we have tightened our planning with brand partners, seasonal challenges to stay in sync with real-time fashion trends. This approach ensures our line up is always created and on trend. Looking ahead, we will continue to involve their exclusive offering into the primary driver of customer mind share and brand loyalty. Building on our optimistic buying strategy, we will successfully speed up our buying cycle. Over the past few months, our teams have locked in a high value of exclusive low-priced inventory that is now flow through the platform. This has enhanced the treasury and experience for our customers. We are seeing strong daily habits from our high-value shoppers will return more frequency to discover our latest alive. This differentiates merchandising approach likely fit in the strength of our SVIP program by offering exclusive access to privesales and unique inventory. We are driving both member acquisitions and loyalty. A great example is our recent event with a global athletic brands where curated selection deliver a surge in new SPA design apps, particularly among young mall shoppers and sales value many times about the baseline. In line with the push of high-value engagement, we have shifted towards a more target acquisition model using refined agreeing that identify members with the highest long-term value by replacing genetic benefits with tiered service system, we are directly rewarding higher spending with exclusive product success, deepened discount one-stop customer support and value-added benefits, this will further optimize the conventions and individual spend. These integrated assets ensures the SVIP program remains our primary engine for sustainable revenues and earnings growth. At the pace of the change in retail accelerate, we were excited to embrace the broad opportunities AI offers. Our initial focused on putting the customer first enhancing experiences through virtual try-ons, smart search and recommendations and automated customer support. We also leveraged AI GC to reach potential customers more effectively with automated content. Having proven this use case, we are now shifting our focus towards scaling their capabilities for great operational impact. For example, we are using generative AI to scale personalized marketing by combined our operational expertise with real-time customer feedback. Our AI marketing agent effectively generally tailored creative across video, photo and tax phones. This has already driven a clear lift in our customer acquisition efficiency. Beyond the marketing, AI is increasingly empowering our brand partners with advanced business analyst deep customer cohort insights and optimize merchandising strategy by angling our strategy in the off-price model and leveraging best-in-class technology, we have identified more effective ways to serve our customers from dynamic merchandising to the smart supply chain. This allow us to continue earnings customer loyalties through every interaction. We remain committed to investing in our people and our platform. We are confident that by continuously optimize our operational strategies. We were driven steadily profitable growth for the long term. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Mark Wang: Thanks, Eric, and hello, everyone. Our latest results landed within our guided range reflecting a dynamic quarter that was heavily influenced by late Chinese New Year. The holiday pyrite triggered a concentrated surge in demand for winter and early spring apparel categories where our merchandise and resonate well with a broader base of consumers. By successfully capturing this big season opportunities, we proved that the effectiveness of our coordinated efforts across merchandising, customer engagement and operations. This operational synergy directly fed into our bottom line. Margins remain healthy and stable, underpinned by highly favorable category mix and our continued operational discipline. As Eric outlined, we maintained focused strategic investments in our key growth drivers, expanding differentiated merchandise offerings, lifting SVIP's engagement and-- scaling AI integration across our operations. At the same time, we continue to manage our broader resource pool with strict prudence dynamically shifting spend to our most productive activities. This balanced approach ensure we sustain solid baseline profitability by prioritizing high-quality profitable revenue today. Simultaneously, it allows us to systematically strengthen our foundations for the long term. Even as we navigate an uncertain macroeconomic backdrop. Turning to shareholder returns. We remain firmly on track to deliver on our 2026 commitment of returning Nolan 75% of full year 2025 non-GAAP net income to shareholders. In April, we completed our annual dividend, distributing approximately USD 300 million. For the quarters ahead, we look forward to executing the remaining balance of our shareholder return program. Our free cash flow outlook is robust, and we have the full financial capacity to meet our full year allocation target. Now moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented below in nib and all the percentage changes are year-over-year change unless otherwise noted. Total net revenues for the first quarter of 2026 increased by 1.2% year-over-year to RMB 26.6 billion from RMB 26.3 billion in the prior year period. Gross profit increased by 6.8% year-over-year to RMB 6.5 billion from RMB 6.1 billion in the prior year period. Gross margin increased to 24.4% from 23.2% in the prior year period. Total operating expenses were RMB 4.2 billion compared with RMB 4.0 billion in the prior year period. As a percentage of total net revenue, total operating expenses was 15.7% compared with 15.3% and in the prior year period. Fulfillment expenses were RMB 2.0 billion compared with RMB 1.9 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 7.7% compared with 7.2% in the prior year period. Marketing expenses decreased by 1.8% year-over-year to RMB 719.3 million for RMB 732.1 million in the prior year period. As a percentage of potent revenues, marketing expenses decreased to 2.7% from 2.8% in the prior year period. Technology and content expenses decreased by 0.2% year-over-year to RMB 448.2 million for RMB 449.1 million in the prior year period. As a percentage of total net revenues, technology and content expenses was 1.7%, which stays slight as compared with that in the prior year period. General and administrative expenses RMB 950.5 million compared with RMB 9050.8 million in the prior year period. As a percentage of total net revenues, general and administrative expenses were 3.6%, which is light as compared with that in the prior year period. Income from operations increased by 9.7% year-over-year to $2.5 billion from RMB 2.3 billion in the prior year period. Operating margin increased to 9.4% from 8.7% in the prior year period. Non-GAAP income from operations increased by 3.5% year-over-year to RMB 2.7 billion from RMB 2.6 billion in the prior year period. Non-GAAP operating margin increased to 10.2% from 10.0% in the prior year period. Net income attributable to Vipshop's shareholders increased by 13.6% and year-over-year to RMB 2.2 billion from RMB 1.9 billion in the prior year period. Net margin attributable to SVIP shareholders increased to 8.3% from 7.4% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 4.48 from RMB 3.72 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 2.31 billion compared with RMB 2.31 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders was 8.7% compared with 8.8% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS increased to RMB 4.6 billion from RMB 4.43 in the prior year. As of March 31, 2026, we had cash and cash equivalents and restricted cash of RMB 28.3 billion and short-term investments of RMB 2.7 billion. Looking forward to the second quarter of 2026, we expect our total net revenues to be between RMB 24.5 billion and RMB 25.8 billion, representing a year-over-year decrease of approximately 5% to 10% to 0%. Please note that this forecast reflects our current and preliminary of the market and operational conditions, which is subject to change. With that, I would now like to open the call to Q&A. Operator: [Operator Instructions] We'll now take the first question today. This is from Thomas Chong from Jefferies. Thomas Chong: [Interpreted] My first question is about the monthly GMV trend. Given that we have seen some softness in industry parcel volume the past few weeks or even last month. So how is our monthly GMV so far? And my second question is relating to June team. How should we think about the rent this year versus last year? And on top of that, how is the consumer sentiment these days that we should think about the outlook for the second half? Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] Okay. So we actually started the year on a very strong note. We have seen a holiday search during the January to February period. when consumers actually concentrate their buying activities and that effectively proved forward demand. So following the holiday period, we saw a very apparent moderation of sales in March and as we enter the second quarter, the April data does not turn out very well, slightly it's not improving from March and into May to date, still very challenging. But actually, we saw a slight pickup in consumer activity. . But as we have been through half of the quarter, it seems that we have relatively low visibility on consumer sentiment and activity, how the rest of the quarter will turn out view depends on the long industry promotion, which we also don't have very big expectations. So we think it's prudent -- it's more prudent for us to give a conservative guidance and reset our second quarter expectations. Turning to our outlook for the full year, we think we still have opportunities in the second half and we believe as consumer sentiment may be improving marginally we should be able to capture opportunities in discretionary spending, especially apparel. And we look forward to making the best effort to maintain a steady operational performance for the second half. So for the full year, I will continue to believe that we will maintain steady outlook. Operator: We will now take the next question. This is Fama Vicky Wu from CICC. Unknown Analyst: [Interpreted] I would like to ask for some updates regarding Shanshan outlets. First, could you walk us through Shanshan's first quarter performance. And second, we've noticed that the Vipshop commercial rate is about to be launched. And how should we assess its subsequent impact on the financial statements? Unknown Executive: Well, thanks for your question. And actually, Shenzhen Outlet business is quite strong in the first quarter, and the GMV growth around 30% year-over-year. So -- and thanks for your question regarding the REIT. And I think some of the investors may be aware that VIP stat commercial rate obtained official approval from the CSRC and the Shanghai stock team in late April and complete the pricing process on May 19. And there are 2 underlying assets. Shenzhen less in Zhengzhou and Harbin, both the material as operate for around 10 years. And both outlets hold leading positions in their regional markets. Chung Outlets is the highest grossing ale in Hunan province for the Harman ranks first in Heilongjiang products. And the commercial rigs should feature more flexible policy regarding the fund usage and expansion mechanism. And actually, in addition to these 3 outlets already used as underlying assets for the REIT, we also hold another 18 projects, demonstrating strong potential for future expansion. We will count further evaluation with on our strategy and market conditions. And for the accounting treatment for this Zhengzhou and Harbin we subscribed for 49% of the total shares in the commercial rate. In simple terms, we will lose control and we will deconsolidate the investment from our financials and recognize the related investment again accordingly. And more specifically, on a GAAP basis, we will book a onetime investment gain of around RMB 5.3 billion in the second quarter, an increase of CAD 1.7 billion income tax. And cash flow-wise, we will see a significant increase in net cash inflow of RMB 1.7 billion in the second quarter. Operator: We will now take the next question. This is from Alicia Yap from Citigroup. Alicis a Yap: [Interpreted] I wanted to follow up, I think management earlier mentioned that since you guys saw April is a negative growth for your platform? And then maybe May, that also so far month-to-date is also -- seems to be negative. But then I think last week, we have China retail sales data, is the total apparel sales is actually grew 3.6% in April. So just wanted to see where is the misconnect. Is it a lot of these spending been shifting to off-line or is it there are some of the market share, our market shares are losing to other online platform. And then related to that is also on the Shasun outlook. Also, I think mentioned the platform grew like 30-plus percent. I also wanted to know, is this because of the consumer behavior that you observe started to shift more to the offline shopping? Or is it because Shanshan actually have certain merchandise, is that VIP online does it have? Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] Okay. So the NBS data, the apparel sales, the growth of 3.6%, you have mentioned actually refers to both online and off-line. Based on our observation, actually online, we have noted -- we have seen a very notable decline -- and we are actually quite in line with the industry trend. And off-line, we do see very strong growth. We believe it could be the difference of consumer activity with online and off-line shopping. When they do online shopping, they tend to return a lot. So that would make the sales and after revenue data are more compressed. And with offline consumers do shift part of their spending increasingly to outlet channels. And it's actually the same with merchants, with brand partners they have been shifting a little bit more resources through offline outlet channels as well. But we think it's still partially holiday-driven. And going forward, we have to see whether the momentum can be sustained. In addition, the offline out -- the outperformance is actually benefiting from a higher concentration of certain categories, especially both where and outdoor products. That makes their sales performance exceptionally strong because consumers tend to shop into these categories is just being fitting in with their lifestyle. And it's actually the same thing with the online category performance, even in April and May, when we do see a broader weakness in the power category, a sport where and outdoor products continue to outperform, I think the real weakness is actually going into a discretionary -- more discretionary apparel categories like women's and men's wear, which are pretty much fashion-driven. So I think we still need some time to see whether the discretionary spending will turn out better than expected going forward. Operator: We will now take the next question. This is from Ronald Keung from Goldman Sachs. Ronald Keung: [Interpreted] First, I want to ask about the GMV gap with revenue. Is that due to Shanshan or maybe the return rates have changed? Second is given that the March, April, May trends have been quite soft, should we take this or read this into the second half given the pace in the third quarter last year is not a low one, which, therefore, the basis is normal. So how should we think of the recent trends in translating to our expectations into the second half? . Unknown Executive: Well, thanks for your question, and let me answer the first question. Actually, the year-over-year growth gap between revenue and GMV in the first quarter increased due to the following 2 reasons: the first 1 is return exchange rate slightly increased year-over-year due to higher contribution from apparel categories and SVIP members. And secondly, just you mentioned the increased GMV contribution from financial outlets given the extension operates on a commission-based model. So from accounting-wise, we recognize this revenue based on net method, which result in revenue to GMV gap become wider. Eric Shen: [Foreign Language]. Jessie Fan: [Interpreted] In terms of our full year outlook, even when we say near-term pressure, from March to May to date. We think it's still within our control. It's just from negative 5% to 0%. That's the range we are confident to maintain and also the recent softness is related to a number of factors, weather condition, seasonal transition to spring and the summer apparel. Of course, there is a bit of uncertainties on consumer sentiment and behavior, et cetera. . So we may need more time to see whether the trend will be improving going forward. But for the full year, we would think our full year target is still achievable. And by continuously optimizing our operational strategies, we should be able should maintain at least a steady business performance. Operator: Due to time constraints, that concludes today's Q&A session. At this time, I will turn the conference back to Jesse for any closing remarks. Jessie Fan: Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter. . Operator: And this concludes today's conference call. Thank you for participating, and you may now disconnect. Before you buy stock in Vipshop, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vipshop wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $475,063!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,369,991!* Now, it’s worth noting Stock Advisor’s total average return is 996% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 21, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Vipshop (VIPS) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Interested in Vipshop Holdings Limited? Here are five stocks we like better. Vipshop’s Q1 revenue rose 1.2% to RMB 26.6 billion, while profitability improved more quickly: gross margin expanded to 24.4% and net income attributable to shareholders climbed 13.6% year over year. Management said results were helped by strong holiday demand and better operational discipline. The company warned that the later Chinese New Year shifted demand forward, making March, April and May weaker and leading Vipshop to guide Q2 revenue down about 5% to flat year over year. Management said visibility on consumer sentiment remains limited, especially ahead of the 618 shopping event. Vipshop highlighted ongoing growth in SVIP memberships, merchandising optimization and AI initiatives, while its Shan Shan Outlets business posted about 30% GMV growth. The company also completed pricing on its commercial REIT and said it remains on track with its shareholder return plan. Vipshop (NYSE:VIPS) reported modest revenue growth and stronger profitability for the first quarter of 2026, while management said a later Chinese New Year pulled forward demand into the holiday period and contributed to softer sales trends in March and into the second quarter. On the company’s earnings call, Co-founder, Chairman and CEO Eric Shen said the quarter reflected a “significant calendar-driven shift” tied to the timing of the Chinese New Year. He said holiday demand was strong, particularly in apparel, but that the surge effectively pulled forward some demand and left March weaker. → CAVA Group’s Stock Looks Delicious After Strong Earnings “What’s important to highlight is the sustained health of our customer base,” Shen said, pointing to growth in the company’s SVIP paid membership program. Vipshop said SVIP members grew 9% year over year during the quarter and accounted for 55% of online spending. CFO Mark Wang said Vipshop’s first-quarter results came in within the company’s guided range. Total net revenues increased 1.2% year over year to RMB 26.6 billion, compared with RMB 26.3 billion in the prior-year period. → SpaceX IPO: Opportunity? Or the Ultimate Hype Trade? Gross profit rose 6.8% to RMB 6.5 billion, while gross margin improved to 24.4% from 23.2% a year earlier. Wang attributed the margin performance to a favorable category mix and continued operational discipline. Income from operations increased 9.7% to RMB 2.5 billion, and operating margin rose to 9.4% from 8.7%. Non-GAAP income from operations increased 3.5% to RMB 2.7 billion, with non-GAAP operating margin improving slightly to 10.2% from 10.0%. → 2 Software Stocks Turning AI Fears Into Fundamental Gains Net income attributable to Vipshop shareholders rose 13.6% year over year to RMB 2.2 billion, and diluted earnings per ADS increased to RMB 4.48 from RMB 3.72. Non-GAAP net income attributable to shareholders was RMB 2.31 billion, flat with the prior-year period, while non-GAAP diluted earnings per ADS increased to RMB 4.68 from RMB 4.43. Vipshop ended the quarter with RMB 28.3 billion in cash, cash equivalents and restricted cash, along with RMB 2.7 billion in short-term investments. Vipshop guided for second-quarter net revenues of RMB 24.5 billion to RMB 25.8 billion, representing a year-over-year change of approximately negative 5% to 0%. During the question-and-answer session, Shen said January and February were very strong because consumer purchasing activity was concentrated around the holiday period. However, he said the company saw a decline in March, and April was also weak. May remained negative to date, though Shen said it had improved somewhat from April. Jessie Zheng, Vipshop’s Head of Investor Relations, said the company had “relatively low visibility on consumer sentiment and activity” after the first half of the quarter. She said management had “not very big expectations” for the month-long industry promotion period associated with 618, a major midyear shopping event in China. Shen said Vipshop expects the 618 period to be relatively stable, not especially strong or weak, and that the company took a conservative approach to its second-quarter forecast. For the second half, management said it sees potential opportunities if consumer sentiment improves marginally, particularly in discretionary spending and apparel. Shen said Vipshop is continuing to focus on “quality of growth” through merchandising optimization, customer engagement and artificial intelligence integration. He said the company has benefited from a faster merchandising approach after realigning its teams last year, allowing it to move from market insights to products on the platform more quickly. The company is also pushing its “Made-for-Vipshop” line into a new growth phase, with higher standards for quality, style and value, Shen said. Vipshop is coordinating more closely with brand partners’ seasonal calendars and fashion trends, while seeking to lock in exclusive low-priced inventory. Shen said the company’s merchandising strategy supports the SVIP program by offering members access to private sales and differentiated inventory. He cited a recent event with a global athletic brand that drove a surge in new SVIP sign-ups, particularly among young male shoppers, and sales value “many times above the baseline.” On AI, Shen said Vipshop initially focused on customer-facing applications such as virtual try-ons, improved search and recommendations, automated customer support and AI-generated content. The company is now using generative AI to scale personalized marketing, including video, photo and text content, which Shen said has improved customer acquisition efficiency. He also said AI is being used to support brand partners with business analytics, customer cohort insights and merchandising strategy. Wang said Vipshop’s Shan Shan Outlets business performed strongly in the first quarter, with gross merchandise value growing around 30% year over year. Responding to an analyst question about offline trends, Zheng said China’s reported 3.6% apparel retail sales growth included both online and offline channels. Based on Vipshop’s observations, she said online apparel sales showed a notable decline, while offline growth was strong. She said higher online return rates may be compressing sales and revenue data, while consumers and brand partners have shifted some spending and resources toward offline outlet channels. Zheng also said offline outlets benefited from a heavier concentration in sportswear and outdoor products, categories that continued to outperform online even as broader apparel categories such as womenswear and menswear weakened. Wang also addressed Vipshop’s commercial REIT, which he said received approval from the China Securities Regulatory Commission and the Shanghai Stock Exchange in late April and completed pricing on May 19. The REIT includes two underlying assets: Shan Shan Outlets in Zhengzhou and Harbin. Wang said Vipshop subscribed for 49% of the total shares in the REIT and will deconsolidate the assets from its financial statements. On a GAAP basis, Wang said Vipshop expects to record a one-time investment gain of about RMB 5.3 billion in the second quarter, along with an increase of RMB 1.7 billion in income tax expenses. He also said the transaction would result in a significant increase in net cash inflow of RMB 1.7 billion in the second quarter. Wang said Vipshop remains on track with its 2026 commitment to return no less than 75% of full-year 2025 non-GAAP net income to shareholders. The company completed its annual dividend in April, distributing approximately $300 million. For the quarters ahead, Wang said Vipshop expects to execute the remaining balance of its shareholder return program and has the financial capacity to meet its full-year allocation targets. Vipshop Holdings Limited (NYSE:VIPS) is a leading online discount retailer in China, offering high-quality branded products at competitive prices through a time-limited, flash-sales model. The company provides consumers with access to a rotating selection of merchandise, combining the excitement of limited-time offers with curated brand partnerships to drive customer engagement and loyalty. Vipshop’s platform features a diverse range of product categories, including apparel, footwear, cosmetics, home furnishings, digital electronics and other lifestyle goods. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Vipshop Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

This article first appeared on GuruFocus. Total Net Revenues: RMB26.6 billion, a 1.2% increase year-over-year. Gross Profit: RMB6.5 billion, a 6.8% increase year-over-year. Gross Margin: Increased to 24.4% from 23.2% in the prior year period. Total Operating Expenses: RMB4.2 billion, compared to RMB4.0 billion in the prior year period. Fulfillment Expenses: RMB2.0 billion, 7.7% of total net revenues. Marketing Expenses: RMB719.3 million, a 1.8% decrease year-over-year. Income from Operations: RMB2.5 billion, a 9.7% increase year-over-year. Operating Margin: Increased to 9.4% from 8.7% in the prior year period. Net Income Attributable to Shareholders: RMB2.2 billion, a 13.6% increase year-over-year. Net Margin Attributable to Shareholders: Increased to 8.3% from 7.4% in the prior year period. Cash and Cash Equivalents: RMB28.3 billion as of March 31, 2026. Short-term Investments: RMB2.7 billion as of March 31, 2026. Revenue Guidance for Q2 2026: Expected to be between RMB24.5 billion and RMB25.8 billion, a year-over-year decrease of approximately 5% to 0%. Warning! GuruFocus has detected 5 Warning Signs with NVDA. Is VIPS fairly valued? Test your thesis with our free DCF calculator. Release Date: May 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Vipshop Holdings Ltd (NYSE:VIPS) reported a 9% year-over-year growth in SVIP members, indicating strong customer loyalty and engagement. The company successfully captured a surge in demand during the holiday season, particularly in the apparel category, which contributed positively to their financial performance. Vipshop Holdings Ltd (NYSE:VIPS) is leveraging AI to enhance customer experiences and improve operational efficiency, which has already shown improvements in customer acquisition efficiency. The company maintained healthy and stable margins, supported by a favorable category mix and operational discipline. Vipshop Holdings Ltd (NYSE:VIPS) completed its annual dividend distribution of approximately USD300 million, demonstrating a commitment to shareholder returns. The company experienced a softer March due to a calendar-driven shift from the later Chinese New Year, impacting overall quarterly performance. April and May showed challenging consumer activity with low visibility on consumer sentiment, leading to a conservative guidance for the second quarter. There is a noted decline in online sales, with a shift in consumer spending towards offline channels, particularly in outlet shopping. The company faces uncertainties in consumer sentiment and behavior, which could impact future performance. Vipshop Holdings Ltd (NYSE:VIPS) expects a year-over-year decrease in total net revenues for the second quarter, reflecting ongoing market challenges. Q: How is Vipshop's monthly GMV trend given recent softness in industry parcel volume? What are the expectations for the June 18 event and consumer sentiment for the second half? A: (Ya Shen, CEO) We started the year strong with a holiday surge in January and February, but saw a moderation in March. April's data did not improve significantly, and May remains challenging. We have low visibility on consumer sentiment, so we are giving conservative guidance for Q2. However, we see opportunities in the second half, especially in discretionary spending like apparel, and aim to maintain steady operational performance. Q: Can you provide updates on Shan Shan Outlets' performance and the impact of Vipshop's commercial REIT? A: (Yuhua Wang, CFO) Shan Shan Outlets showed strong performance with 30% GMV growth year-over-year. The Vipshop commercial REIT, approved in April, includes mature outlets in Zhengzhou and Harbin. We will deconsolidate these from our financials, recognizing a one-time investment gain of RMB5.3 billion in Q2, with a significant cash inflow of RMB1.7 billion. Q: Why is there a disconnect between Vipshop's performance and China's retail sales data, which showed growth in apparel sales? A: (Jessie Zhang, Head of Investor Relations) The 3.6% growth in apparel sales includes both online and offline. Online sales have declined, aligning with industry trends, while offline sales, particularly in outlets, have grown. This shift is partly holiday-driven, with strong performance in sportswear and outdoor products. Online, these categories continue to outperform, while discretionary apparel like women's and men's wear remains weak. Q: What accounts for the GMV and revenue gap, and how should we interpret recent trends for the second half? A: (Yuhua Wang, CFO) The GMV-revenue gap increased due to higher return rates and increased GMV from Shan Shan Outlets, which operates on a commission-based model. Despite recent softness, we believe our full-year target is achievable by optimizing operational strategies and maintaining steady business performance. Q: How does Vipshop plan to address the challenges in consumer sentiment and behavior? A: (Ya Shen, CEO) We are focusing on optimizing our merchandising portfolio, engaging with customers, and leveraging AI to enhance our off-price retail model. By improving our SVIP program and exclusive offerings, we aim to drive member acquisitions and loyalty, ensuring sustainable revenue and earnings growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, February 26, 2026 at 7 a.m. ET Chief Executive Officer — Eric Shen Chief Financial Officer — Mark Wang Head of Investor Relations — Jessie Fan Need a quote from a Motley Fool analyst? Email [email protected] Eric Shen: Good morning, and good evening, everyone. Welcome, and thank you for joining our fourth quarter and full year 2025 earnings conference call. This year has been defined by strategic realignment, operating resilience, and a firm commitment to high-quality growth in a dynamic market. While we entered 2025 facing a multi-consumer environment, I'm pleased to report that the agility of our off-price retail model has allowed us to stabilize our top-line performance and continue to deliver robust profitability for the full year. Our fourth quarter results came in slightly below our expectations. This was primarily due to a deceleration in December sales as customer activity slowed. We attributed it to the weak winter apparel demand alongside delayed holiday shopping due to a later spring festival. While we saw short-term pressure this quarter, our long-term road map remains unchanged. We continue to make solid progress that reinforces our flywheels from merchandising, customer engagement, to operations. In 2025, we implemented a strategic reorganization of our merchandising and customer engagement team to enhance agility and long-term competitiveness by enabling faster decision-making and breaking down internal silo. We have unlocked a strong foundation for long-term growth. Throughout the year, our merchandising strategy centered on 3 pillars: enhancing customer relevance, building differentiation, and deepening category expertise. Advancing these capabilities has been fundamentally allowed us to consistently and effectively align high-value brand supply with evolving customer demand. We are building a stronger, more connected portfolio of branded products. Last year, our merchandising team further deepened our supply network. This enabled us to acquire more quality deep discount inventory, driving sales growth steadily across our most valuable brands. Leveraging data-driven insights, we are proactively shaping a resilient assortment that wins in growth categories while keeping our supply chains responsive to shifts in customer needs. We are seeing an encouraging early signal of cross-sell from apparel into related categories like mother and baby, childcare, and lifestyle. We will remain focused on refining these synergies to better serve our customers' diverse needs. Our Made for VIP line has become a key driver of our differentiation, with sales in these exclusive categories growing by over 40% to account for 5% of online apparel sales in 2025. Having successfully built these foundations of scale, we are now in the position to evolve our approach for the next stage of growth. We are streamlining our exclusive products to build a clear identity and drive mind share when customers see an exclusive tech, which should instantly recognize a promise of high value and reliability. This is how we transfer the line into competitive differentiations, reliable courage, on-trend selection, and exceptional value. Our optimistic buying proactive is another key differentiator, allowing us to select a portfolio of high-demand items from top global and domestic partners. This delivers a compelling value proposition based on quality, price, and style. Combined with dynamic fresh sales and treasure hunt experience, it drives wild customer apparel, full excitement, and encourages repeat visits. We are moving faster to lock in more exclusive low-priced inventory to attract high-value shoppers and deepen the discovery drive of our platform. To enhance customer experience, one team now manages the entire journey from initial brand and acquisitions to value-driven growth and lifelong engagement. We have enhanced our capabilities to target and engage user efficiency, which serves as the core foundation of our full life cycle customer strategy. Early progress is promising, and we are focused on the sustainable runway ahead to build a more seamless cross-category experience that maximizes lifetime value. The Super VIP program remains the cornerstone of our growth. Active SVIP members sustained double-digit growth for the fourth quarter. For the full year 2025, active SVIPs grew by 11% to 9.8 million, contributing 52% of our online spending. Through exclusive upgrades such as providing sales and family benefits, SVIPs consistently demonstrate significantly higher retention and repeat purchase than those of regular customers. Their sustained loyalty and spending power provide a reliable revenue stream and increase our apparel to brand partners, seeking high-quality customer access. Turning to the operations. We have enhanced our capabilities to better think merchandise with customer intent, delivering measurable results. We implemented multi-objective optimization in our searching engine, directly improving conversion rate. We also prioritize diversity and freshness in our recommendation engine, which has enriched discovery and drive high browsing frequency and return visits. Look ahead, we are exploring generative search and recommendations to enable more dynamic, interactive, and integrate discovery experience. Lastly, we have made great strides in deploying AI across our business to drive tangible value with advanced AI applications in searching and recommendations, customer service, and marketing. We have enhanced the customer experience and empowering our brand partners, laying a strong foundation for deeper company-wide integration. Notably, our AI-powered customer service effectively automates routine interactions, improving the overall speed and relevance of customer support. The system now manages the majority of product inquiries and generate personalized recommendations with automated resolutions reach approaching 90%. AI-generated content is now widely used in marketing, driving efficiency and effectiveness, taking our own campaign, for example, by leveraging AIGC to automate creatives and placements. We have reduced production costs while optimize customer acquisition efficiency. Furthermore, we have used AIGC to generally summarize our customer reviews and product portfolio, helping brand partners boost their sales effectiveness. With its full-scale launch, our AI virtual try-on feature has proven to be an effective driven customer engagement. Initial data confirm its impact on loyalty, showing that engaged customer has a high rate of repeat visits. Our next phase is fundamentally integration of AI, moving beyond stand-alone workflows to embed it within our core operations, making it primary driver of growth and business-wide efficiency. As we're looking back on 2025, we have become a more agile, customer-central and technology-driven organizations. We have enhanced our leadership in the off-price sector as an indispensable gateway for brand navigation, China shifting consumption landscape, as value shopping become a structural trend. We are uniquely positioned to capture high-value customers and expand our share of wallet through merchandising and supply chain reliability. While the macro environment remains dynamic, our focused strategy and strength execution giving us great confidence in delivering sustainable profitability growth in 2026 and beyond. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Mark Wang: Thanks, Eric, and hello, everyone. We concluded 2025 with resilient performance underpinned by solid profitability in a dynamic market. This financial strength stems from our disciplined approach to investing, ensuring the every dollar we deploy advance our core business and builds lasting momentum. Over the past year, we focused on enabling the business with agility, ensuring our investments in merchandising, consumer engagement, and operational upgrades, as well as AI enhancements, directly strengthen our business core. This discipline has translated into quality earnings and is building the foundation for durable competitive advantage. As Eric emphasized, we have seen tangible progress which has repositioned us for sustained momentum. Our focus remains on stewarding our capital to support its business priorities, ensuring we have both the flexibility and the financial foundation to execute our long-term growth strategy. Turning to capital returns. I'm pleased to confirm that we delivered on our 2025 commitment, returning a total of USD 944 million to shareholders through dividends and share repurchase. For 2026, we are maintaining this momentum. Consistent with our prior year's policy, we intend to distribute no less than 75% of our full year 2025 non-GAAP net income attributable to Vipshop's shareholders. This will be executed through an increased annual dividend of approximately USD 300 million as well as the continuation of our share repurchase program. These actions reflect our confidence in the company's cash-generating capability and our steadfast commitment to shareholder value creation. Now moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented below in renminbi and all the percentage change are year-over-year change, unless otherwise noted. Total net revenues for the fourth quarter of 2025 were RMB 32.5 billion compared with RMB 33.2 billion in the prior year period. Gross profit was RMB 7.4 billion compared with RMB 7.6 billion in the prior year period. Gross margin was 22.9% compared with 23.0% in the prior year period. Total operating expenses decreased by 3.7% year-over-year to RMB 4.9 billion from RMB 5.1 billion in the prior year period. As a percentage of total net revenues, total operating expenses decreased to 15.0% from 15.2% in the prior year period. Fulfillment expenses decreased by 1.0% year-over-year to RMB 2.4 billion from RMB 2.5 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 7.5% compared with 7.4% in the prior year period. Marketing expenses decreased by 6.1% year-over-year to RMB 873.7 million from RMB 903.3 million in the prior year period. As a percentage of total net revenues, Marketing expenses decreased to 2.7% from 2.8% in the prior year period. Technology and content expenses decreased by 9.3% year-over-year to RMB 425.5 million from RMB 469.2 million in the prior year period. As a percentage of total net revenues, technology and content expenses decreased to 1.3% from 1.4% in the prior year period. General and administrative expenses decreased by 5.2% year-over-year to RMB 1.1 billion from RMB 1.2 billion in the prior year period. As a percentage of total net revenues, general and administrative expenses decreased to 3.5% from 3.6% in the prior year period. Income from operations increased by 1.7% year-over-year to RMB 2.90 billion from RMB 2.85 billion in the prior year period. Operating margin increased to 8.9% from 8.6% in the prior year period. Non-GAAP income from operations was RMB 3.2 billion compared with RMB 3.4 billion in the prior year period. Non-GAAP operating margin was 10.0% compared with 10.2% in the prior year period. Net income attributable to Vipshop's shareholders increased by 5.8% year-over-year to RMB 2.6 billion from RMB 2.4 billion in the prior year period. Net margin attributable to Vipshop shareholders increased to 8.0% from 7.4% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS increased to RMB 5.12 from RMB 4.69 in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders was RMB 2.9 billion compared with RMB 3.0 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders was 8.8% compared with 9.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS was RMB 5.66 compared with RMB 5.70 in the prior year period. As of December 31, 2025, we had cash and cash equivalents and restricted cash of RMB 24.1 billion and short-term investments of RMB 5.8 billion. Now I will briefly walk through the highlights of our full year results. Total net revenues were RMB 105.9 billion compared with RMB 108.4 billion in the prior year. Gross profit was RMB 24.5 billion compared with RMB 25.5 billion in the prior year. Gross margin was 23.1% compared with 23.5% in the prior year. Income from operations was RMB 8.1 billion compared with RMB 9.2 billion in the prior year. Operating margin was 7.7% compared with 8.5% in the prior year. Non-GAAP income from operations was RMB 9.9 billion compared with RMB 10.7 billion in the prior year. Non-GAAP operating margin was 9.3% compared with 9.9% in the prior year. Net income attributable to Vipshop shareholders was RMB 7.2 billion compared with RMB 7.7 billion in the prior year. Net margin attributable to Vipshop's shareholders was 6.8% compared with 7.1% in the prior year. Net income attributable to Vipshop shareholders per diluted ADS was RMB 14.15 compared with RMB 14.35 in the prior year. Non-GAAP net income attributable to Vipshop's shareholders was RMB 8.7 billion compared with RMB 9.0 billion in the prior year. Non-GAAP net margin attributable to Vipshop's shareholders was 8.3%, which remained stable as compared with that in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 17.08 compared with RMB 16.75 in the prior year. Looking forward to the first quarter of 2026, we expect our total net revenues to be between RMB 26.3 billion and RMB 27.6 billion, representing a year-over-year increase of approximately 0% to 5%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions, which is subject to change. With that, I would now like to open the call to Q&A. Operator: [Operator Instructions] We will now take the first question coming from the line of Ronald Keung from Goldman Sachs. Ronald Keung: [Foreign Language] Jessie Fan: Ronald, would you please translate your question into English please? So maybe I'll just translate the question first and then let Eric respond to the question. [Interpreted] So, the first question is about the quarter-to-date business performance, whether the seasonality, especially late spring festival has impacted the business performance and have -- have we seen any recovery in the business? Based on the guidance, it seems like we are accelerating revenue growth a little bit. The second question is about the margin outlook for 2026 because we have seen that margins for 2025 seems to be under a little bit pressure in terms of GP margin and NP margin, whether we have new investments for 2026? And how do we think about gross margin cost and expenses and NP margin, whether we can stabilize our margin profile. Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] So, on the first question regarding the Q1 guidance, let's take a look at the Q4 first. I think our online sales actually took a hit in Q4, especially in December. It was way too warm in China in most regions for people to buy winter clothes. And since Chinese New Year is late this year, nobody was actually in a rush to shop for the holiday. Because of that, apparel didn't nearly as well as our other categories. But as we head into the first quarter, Q1, actually, we have seen consumer activity has clearly picked up, largely driven by New Year shopping. And if we look at January and February combined, actually, we do see a nice recovery in our core business. So, this has kept us firm on track with our guidance of 0% to 5% top line growth, and we are confident that we can deliver that growth and for Q1 and for the rest of the year. Second on margins, I think our business philosophy has been very consistent. We remain focused on high-quality growth at sustainable profitable growth for the business, especially in a dynamic macro environment today. So, we expect margins will be stable, and we will make every effort to outperform in terms of margins for 2026 and beyond. Operator: [Operator Instructions] Our next question comes from the line of Alicia Yap from Citigroup. Alicis a Yap: [Foreign Language] I have 2 questions. First is that related to the user growth. I think management previously commented that we are hopeful to see the user growth momentum to sustain. So just wondering if management could share with us what is your expectation for the user growth for 2026? And then regarding the demand, how are you seeing the demand for the apparel versus the non-apparel growth? And second question is related to AI. Just wondering, does management believe the overstocked business model that we have for Vipshop, would that be actually more resilient against this Agentic commerce? And with that, will VIP actually invest more resources into growing the offline business such as the Shan Outlet? Eric Shen: [Foreign Language] Jessie Fan: [Interpreted] So on the first question about customer growth. Customer growth is definitely our top priority. That's actually the foundation for sales growth and ultimately profitability. In Q4, we had thought we should have maintained the customer growth momentum. But due to expected slowdown in consumer activity, actually, customer growth is a little bit under pressure. We expect customer to regrow for 2026. And we ideally, we should see customer growth is actually faster than sales growth to offset the impact of a slightly rising return rate. So we are definitely going to make every effort to bring customer back to growth track in 2026. On the second question regarding category preferences, consumers are still, generally speaking, still cautious and selective and value conscious, but they continue to shop across different categories, including discretionary categories. They just need strong reasons to do so. So that's why we focus so much on providing the best value across the shopping carts, including apparel and non-apparel categories. And we are making changes in both categories, especially in standard categories to drive repeat business for our most valuable customers, including SVIP and high-value customers to increase their cross-category purchases for family shopping. Lastly, on AI. definitely, AI is fundamentally transforming many industries, including the e-commerce industry. And for an off-price retailer like Vipshop, we are definitely adapting to this trend to remain competitive. We believe fundamentally, our business model relies on merchandising on how well we can secure quality deep discount inventory, how well we can provide a best value for customers. We think as long as we make a difference in merchandising and supply chain reliability, we will not be left behind. Of course, the online business is a hypercompetitive business. That's why we look for -- we are constantly looking for opportunities offline, especially with the outlet business, which proves to be a very good business model in terms of stable revenue streams and profitability. So we are actually expanding our presence for Shan outlets which are doing great in terms of sales and profit contribution. And we expect a mirrored pace of expansion into more cities and regions and geographies. We expect to see continued strong growth in terms of sales, revenue and profit from Shan business. And we expect with a strong offline presence, we will be we will be able to offset any potential challenges from AI. Operator: There are no further questions at this time. At this time, I would like to turn the conference back to Jessie for any closing remarks. Jessie Fan: Thank you for taking time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.] Before you buy stock in Vipshop, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vipshop wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Vipshop (VIPS) Q4 2025 Earnings Transcript was originally published by The Motley Fool