Wednesday, November 19, 2014

$VIPS - Vipshop: Q3 Beat, Q4 Guidance “Conservative”

China’s apparel flash sale discounter $VIPS - Vipshop reported better-than-expected third-quarter earnings.
Revenue at Vipshop rose 130% from a year ago to $882.6 million, beating consensus estimate by 2.3% and the company’s own guidance of 122-124% growth. The stellar growth was due partly to 136.8% rise in the number of active customers, according to the company. Non-GAAP earnings per share came in at $0.08, better than the expected $0.07.
Vipshop expects net revenue to grow more slowly in the fourth-quarter, by 84%-87% year-on-year. The mid-point guidance is 3.5% higher than the Bloomberg consensus estimate of $1.2 billion. “On first glance, we view the result as solid and believe the 4Q guidance could be conservative,” wrote Barclays analyst Alicia Yap and team, who have a Buy rating on Vipshop.
Morgan Stanley analyst Robert Lin and team, who also have a Buy rating, said on a quarterly basis the active number of users looks a bit weak:
Vipshop saw total number of active customers and total orders growing 137% and 118% yoy, respectively. However, on a qoq basis, incremental active number of customers was only 2K, which compares with +1.9mn in 2Q14 and +523K in 3Q13. Total orders down marginally 3% qoq; first sequential decline in orders. We think this is due to both Lefeng dilution and a very successful 2Q14 promotion (namely 418). A slower 3Q in online retail also leads to slower qoq growth of Vipshop.
Vipshop remains a star outperformer in 2014, up 183.5% year-to-date.