Vipshop Holdings Profit Surges, Stock Up 9% - Update

(RTTNews) - Vipshop Holdings Ltd. (VIPS) Wednesday reported a surge in profit for the first quarter, as revenues soared reflecting higher number of orders and active customers. Both earnings and revenues for the quarter breezed past Wall Streetestimates. Moving ahead, the Chinese online discount retailer detailed a strong revenue outlook for the second quarter. Shares of the company gained nine percent in after-hour trade.

Guangzhou, China-based Vipshop's first-quarter profit surged to $26.6 million or $0.23 per ADS from $5.8 million or $0.05 per ADS last year.

Adjusted earnings for the quarter rose to $0.63 per ADS from $0.17 per ADS a year ago. On average, six analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Vipshop's revenues for the quarter more-than doubled to $701.9 million from $310.7 million last year. Analysts had a consensus revenue estimate of $650.49 million for the quarter.

The company attributed the revenue growth to the number of active customers, which grew 165.1 percent to 7.4 million and an increase in total orders to 20.2 million, up 129.3 percent, over the prior-year period.

Gross margin for the quarter advanced to 24.9 percent from 23.4 percent last year.

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

Looking forward to the second quarter, the company expects revenues of $780 million to $790 million. Analysts currently expect second-quarter revenues of $685.60 million.

VIPS closed Wednesday's trading at $150.00, up $3.52 or 2.40%, on the Nasdaq. The stock further gained $13.98 or 9.32%, in after-hours trade.