VIPS - Earnings call transcript Q4 2024 | Vipshop Holdings Limited

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Operator

Ladies and gentlemen, good day, everyone, and welcome to the Vipshop Holdings Limited Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed.

Jessie Fan

Thank you, operator. you Earnings Vipshop's Conference thank Full Quarter and XXXX Year Call. everyone, for Fourth joining and Hello, With us today and CEO; are Eric Shen, Mark our our Wang, CFO. and Co-Founder, Chairman

to will contain Act statements their I prepared of Before harbor the of forward-looking that Securities the management today would XXXX. U.S. made begins Private like discussion the remind safe remarks, provisions under you Reform Litigation

safe uncertainties expectations. harbor that to materially statements also statements with risks release statements may actual risks extent in Commission, are to and applies Forward-looking but forward-looking differ and current made. subjected the results to, in include, public the from which our uncertainties and our be Exchange limited those Potential filings to and that earnings to not our call cause this any are outlined Securities may

used are financial details to income call, that refer ADS per relating and measures measures as note earnings reconciliations our shareholders to with accordance to to net non-GAAP Vipshop's on Please non-GAAP measures. our GAAP operating of for attributable GAAP. release U.S. non-GAAP not in this Please presented income income, net the certain such non-GAAP

Mr. turn now Shen. would that, over With I the call to like to Eric

Eric Shen

Good you Year Fourth Quarter Welcome, XXXX morning, and Earnings and good everyone. for and Full evening, thank joining our Conference Call.

cautiously in consumers saw retail turned apparel, doing some base. spend expectations fourth proactively off the with execution. level, quarter focus the address still into the we At a above discretionary to quarter team which in on a challenging priorities high strong in and delivered fourth our results a year, of a to those We positive while growth well fundamentals set categories, strength category changes finish has on our

unique products. offering and Our off-price team meet especially needs, sportswear swiftly include that outdoor in customer seasonal more to moved

total level the our year, up accounting full in For X% apparel of GMV, year cross XX% a once RMB helped sales. That the total us our billion for highest again ago, annual in were history. categories from XXX

its the sales [Technical in non-apparel also quarter, Difficulty]. narrowed in clearly Our by business driven loss the part of fourth

Operator

Ladies line, resume the on will please and your shortly. gentlemen, remain conference

Jessie Fan

Can me? you hear

Operator

continue. please Yes,

Jessie Fan

Hello?

Operator

can year you. Please continue. We

remain Ladies will on conference resume please line, shortly. gentlemen, the your and

the The presenters Please are continue. you. Thank back on line.

Jessie Fan

you can stopped? Operator, where remind us we

Operator

are You online. back

You can continue very CEO. from the --

Jessie Fan

the From CEO part.

Eric Shen

Good you for our Fourth morning Welcome, XXXX thank and Conference Okay. Quarter Full good evening, and Call. and everyone. Earnings Year joining

results cautiously finish year, well the We expectations above categories. to challenging quarter delivered fourth in a discretionary of spend still consumers a set in our while

driven on fourth the into apparel, priorities to proactively changes in strong we a quarter high saw level, strength a which off growth has address with and some base. focus positive growth execution. turned team a Our retail At fundamentally category in

seasonal especially unique offerings include off-price moved sportswear outdoor Our products. more in meet to needs, customer team and swiftly that

up the full billion cross a total from of our accounting history in helped again For year, apparel sales. ago, in GMV, categories RMB the annual year X% level XX% were once total XXX that highest us our for

sales of from in fourth program. trade-in government home part digital the the we in Our by the outperformance as clearly loss opportunities and growth also driven business products its capture quarter, non-apparel narrowed in appearance

fourth who active delivering by for growth, SVIP which and VIP of online members XX% Super strong our a the X.X an XX% accounted contributed a million year our quarter, spending. basis, a its to On customer ago Super online spending On of year. XX% had memberships we VIP last our annual from total extended of of experience. increased team's active differentiated front, double-digit commitment validation is the a In

is Value on key holidays after area merchandising, display of moved needs. customer our portfolio are seasonal and with improvement initial through and getting near-term this shaped to by encouraged urgency. we actions adjustment a In and for each are we We help target identified in promotions. to on product relevant customers operational incentives shop highly series the that and full stay brand

shoppers and sentimental a growth balanced with non-apparel with assortment more drive And and of in apparel to we are products in purchases. more multi-category engaging family frequency

these changes, are XXXX. With better into positioned these going challenges -- with we

long-standing to we successful to we has strategy Importantly, growth. our driving remain for committed dedicate very been in our discount efforts in retail long-term brands, quality and that the factors

and focus unique price and model, value our put these a together that a All on compromise include the deals authentic, no service business quality approach that compelling and differentiated strength includes merchandising That reliability. with highlights suits are through of on low a the strategy.

we highlights, merchandising customers. more to in our reliable business destinations to the specifically, even for invest capabilities our More continue become

X last year, reshaped, including official impactful initial in We team enhancement how our has Following work high-profile global expertise brands been over new and to ways. in developed mastered years program, with X,XXX brought more new brands. many partners

year co-brands, deeper the throughout the managed product great we started breadth for and expect to value of hundred Most depth. truly customer categories opportunities supply to by a secured level fuel the brand recently, seek built by money We several portfolio relationship further hunting in-demand that in dive categories deeper team and great on treasure our has excitement. and our with offerings expanding in

line from compared price XX% strength have for supply focus and to for VIP to and general who year benefiting the The product We categories offering even program some make well year. been came platform within repeat Made bigger. and brands from long, persistent saw year. a adding brand same than become sales better with on joined brands our conversions and all more of sales VIP their for up the the range Made unique orders as of better meaningfully last XXX Another merchandising last our customer quality as did to in area has more differentiated driver clearly

products of a price. customers. to balance to were willing Turning remain compelling the quality largely and They find they when right but pressured, spend

response because of sub-Cs and to a value are the clearly Our we SVIP and real for customers them. more promotions resilient provide have strong

In to through and deals it special get enticing offers. they addition, even the find sales better provide

much see vast continue SVIPs with more more of to regular spend than to the that and happy us. frequency memberships their majority are We renewed them the have customer and

how more technology all important it to fast is drive Given are work the and put things to to changing, growth efficiency.

optimize We and recommendations, which have efforts customer made relentless starts search experience to incrementally and to improve conventions.

team help enable customers addition, In model to way, with general using our the productivity and we efficiency. in more are the AI brand last serve partners them greater to work

contents, shopper Despite expansion We deepened long-term have made the initial we confident building marketing guide, customer and analyze strategy, tools in the of uncertainty, attempts case such given are brand as engagement partners. cohorts. upon business, development service of different applications customer the we taking ongoing strengths and with and our growth merchandising continuity the our we are and in merchandise are for initiatives

compete more we flexibility customers business to and on our focused are into win importantly, environment have an Most infused where in value.

We are current the long to confident growth in term. profitable to in and and beyond situations the ability move sustainable our return

At to financial this call results. me to point, over let Wang, hand over go Mark our the our CFO,

Mark Wang

customers preserving Top fourth to in growth profitability. business. a to We disciplined hello, leaning and seize Okay. Thanks, better reallocate as opportunity In ready swift actions Eric, growth the line while than trying into and non-apparel our we balance business, took for and came know where guidance better endeavor solid in team our or quarter, both every seasonal were holidays, categories achieved and in we our resources to everyone. has family apparel get maximize needs. made

growth. high business. decent our level at a margin basis, XX.X%, year-over-year, all-time from customer decreased a benefiting an On in high from gross investment stepped-up of hit drive remained quality but apparel to margin the Gross X-year reflecting year our contribution full XX%, of incentives

business execution held and profit well in our bottom the on margin improved in scale quarter. both the consistent With efficiency, and up pretty absolute operational line

profit billion X shareholders RMB to which full Vipshop's over margin in a solid attributable to net record comparable us ago. helped was X.X%, year a of largely at year non-GAAP This

await time, future. to to on right the spending over normalize growth returning in foreseeable we we consumer are believe the healthy track we to discretionary As

pace in to profit categories, cash offering well generation move our are and merchandising, align capability. continue around customer and focus our growth at initiatives and supported strength We the impact. These value product by

allocation. XXXX, XXX returned and million we our total dividend a approximately through In USD shareholders of to annual to capital buyback. Turning

For XXXX non-GAAP long year XXXX, our as income dividend we net and consistently our communicated, term. of we in will shareholders to the full return than in buyback. reinforce less value commitment Vipshop's of creation attributable XX% annual to shareholder This combination a

quarterly moving financial our detailed to highlights. Now

Before started, I and year-over-year I presented are numbers that below the are change all financial to percentage change, noted. like renminbi, would in unless otherwise all clarify get

the prior the billion X.X Total with period. period. prior billion margin of quarter was XXXX was revenues in RMB RMB net Total year profit the XX.X compared was year X.X in were operating period. compared Gross with billion billion XX.X the with XX.X% year billion expenses for the prior X.X RMB billion compared in Gross RMB period. RMB prior X.X RMB XX.X% with in compared fourth year

As total was with a percentage of XX.X% in period. prior expenses the compared total revenues, net operating XX.X% year

X.XX decreased in period. RMB the X.X% billion expenses from year RMB prior by X.XX billion year-over-year Fulfillment to

compared As a expenses percentage prior revenues, total with year net in X.X% was X.X% of fulfillment the period.

period. by XXX.X RMB prior XXX.X million Marketing million in RMB from year-over-year year expenses increased to the XX.X%

period. X.X% Technology revenues, compared with XXX.X marketing content in expenses and X.X% a to decreased was year X.X% As in million year-over-year million year percentage RMB of prior net prior by the the from RMB total XXX.X period. expenses

the period. of flat X.X%, percentage a total content in expenses technology that stayed which year and net revenues, prior was as with compared As

XX.X% period. RMB and billion RMB in X.X year General by the X.X administrative billion increased expenses to from year-over-year prior

in a was RMB in period. compared period. expenses Operating year the the X.X billion operations were was of compared prior X.X with general with X.X% total year margin administrative revenues, net X.X% the the XX.X% income RMB As X.X% prior and year RMB X.X operating billion compared Income from in percentage compared period. RMB billion the from with was period. with was XX.X% with compared billion Non-GAAP year operations margin XX.X% prior Non-GAAP X.X in period. prior year prior in

net RMB Vipshop's compared net was Non-GAAP RMB year with the was shareholders X.XX in attributable Vipshop's year income billion the period. the margin billion shareholders period. X.X% X.X Vipshop's billion to margin billion X.X% X.X prior with year attributable with diluted year period. compared in compared X.X to in RMB attributable was income Net year shareholders RMB to shareholders X.X% the attributable prior compared prior X.X was period. X.X% RMB Vipshop's compared Net attributable in shareholders per in with to with to prior Vipshop's Non-GAAP prior income ADS the period. X.XX RMB Net was

X.XX attributable RMB net the with ADS RMB period. Non-GAAP year was compared X.XX per income diluted in to Vipshop's shareholders prior

RMB of cash XX, we billion investments As XXXX, billion. XX.X cash and December equivalents restricted cash X.X of RMB and had short-term and of

was briefly the XXX.X in year I year. our the through net RMB the from XXX.X of walk XX.X compared XX.X billion Now revenues to with prior year. will RMB XX.X% Gross XX.X% billion year. in profit highlights increased RMB were billion margin full results. RMB prior Gross compared billion prior the in with Total

billion from X.X% margin X.X Income in Vipshop's from year. in prior in X.X% in X.X% was year. shareholders the in billion RMB RMB RMB X.X% to operations Net Net attributable from margin to RMB with prior prior year-over-year X.X% to X.X% from X.X the shareholders increased X.X% from billion year-over-year increased X.X XX.X Operating the year. X.X XX.X RMB Non-GAAP billion to prior operating prior income billion Vipshop's income X.X% the increased year. operations in margin Non-GAAP increased the billion by with compared prior was compared the year. RMB by attributable to from year. to

net to RMB was net in with compared shareholders X.X was to shareholders XX.XX year. shareholders net margin with prior attributable year. per Non-GAAP ADS compared was year. in X.X XX.XX year. income billion the billion in RMB X.X% income the shareholders RMB prior compared the RMB X.X% with attributable RMB diluted Net was to prior in Vipshop per prior attributable RMB XX.XX Non-GAAP diluted Vipshop's income attributable XX.XX the ADS compared Vipshop's Non-GAAP Vipshop's with to

year-over-year quarter the total operational current conditions, Please between we decrease XXXX, to RMB to is XX.X and subject forecast first of market change. X% our forward preliminary of and and revenues view reflects approximately a that billion RMB of this which the X%. to Looking note our to net representing XX.X be expect billion,

call the would I to that, With now open like to Q&A.

Operator

Instructions] from now Chong take line will our the [Operator Jefferies. of from Thomas We first question

Thomas Chong

actually our comment Congratulations sentiment? year-to-date end question. Can end results. towards seeing on solid guidance? a Are we is of about the can first of My QX And recent question about performance the very the the about far? management set are also first we low comment so revenue management my That's our or high guidance. more consumer

XXXX it can trend my great about think would think about the second Yes, early the revenue the it rest should I but bit outlook. margin And is now, question comment about is if right how be a of management and the throughout year? the we

Language] [Foreign

Eric Shen

Language] [Foreign

Jessie Fan

Okay. [Interpreted]

of As ideal festival, the different is on to I February. spring for trend, within a look track the QX not think year-to-date timing date, to our If our revenue plus guidance. in guidance of February actually, that we terms of January look single month business in that or the it's at January at because

the and still on quarter, takes prior until to the March sentiment, of have clear have in recovery we still But since it's guidance. when to it's whether to higher it's we actually assess picture end, marginally than or quarter apparently, apparel. we better the although promotions slightly a fully we think lower observed we still the trend. be expected, better then, early spring believe into when back sell may upcoming we is it's time And than going end of quarters. And started consumer we how the And

for But are now. track on we for sure,

back revenue. the the GMV what year should or to because between there so was we of up. -- did everything return get some And well. whether of not we rate, just Last positive just that year, and is gap As That's full trajectory. for is we slightly revenue. GMV still think GMV XXXX, hope, it's the

in So revenue business operating but year, of the this will is terms we metric. believe slightly down, to -- every every from endeavor we bring make every back

efforts are we and the will we solid opportunities customer and high-quality course, a make a our growth consistently, profitability in to well. we as of try have going revenue to done maximize Of to we maintain growth condition pursue that terms strategy will under as

overall, an opportunity will maximize and profit of have we we profitability maintain growth. portion our so to will to solid our try we invest But growth that. a We opportunities, sure into make will do

Operator

next Yap from now Citigroup. of the will We our take line from Alicia question

Alicis a Yap

X quick So Language] [Foreign questions.

First regarding is that your XQ outperformance.

know a more to bit the wanted Just little drivers.

the So that your that improvement effective marketing environment? is benefiting promotion? because is some macro mainly Or of also of from

the in is or benefiting GMV, how And much that trade-in of actually benefits? then second question XQ your is related to

Eric Shen

[Foreign Language]

Jessie Fan

your to few be to question ahead to on well first expectations out Well, due QX couple turned of [Interpreted] a of factors.

we First, of active see I a more think it helped a normalized little our to sales. bit when started the end helped conditions that clothing November December winter because consumers see weather from bit into became we

lot in also, course, turned our which as we growth actions brought It additional And and a of sub-Cs also not more customers it quarters. offerings. was the as consumer decent the And did we in promotions product targeting slightly portfolio sentiment, for merchandising did in-demand bad high-value than value money, better some opportunities. on had thought. And of we terms of prior in proactive

GMV on And in of did the RMB it's incremental XXX absolute narrow the the RMB nonapparel not question little trade-in help loss sales meaningful. million terms products it of from still of and terms QX. category It's in managed your to appliances in benefiting digital because business. related XXX home to million from that GMV, our bit around the in second to a But we program,

Operator

question of from Xiong line UBS. take we'll Next, Wei from the

Wei Xiong

behind? I 'XX? the further good improve very the is, If we about are gross trend results of there seeing base of ask full XXXX. room to margin [Foreign want what drivers year year-on-year Language] First, the on in to Are the

up follow for to profit XXXX. just the also on net margin And

are to we we room pursue net possible, soon are goal and the margin GMV stable turning revenue expecting that we positive as of trying Given seeing as improve? to are Or further year-on-year?

judgment also, our margin latest And the long-term what's the level on net company? sustainable for

Eric Shen

Language] [Foreign

Jessie Fan

remember, trend margin high margin XX.X% terms [Interpreted] XXXX. we GP margin, on in of the an X-year hit of In GP

a them partners good brand so think our discount can we actually the and in afford we profit, deep merchandising example, incentivize a to and that to together. inventory we gross that's more for very grow portion to more So bring level, to of can invest

thinking on about them and to the platform have allow levels instead of So more growing brand prudently the are partners fixed our our opportunity for we reviewing take-rate a maintaining for with business margin just platform. GP

and And NP pretty the the managing a expense cost turning of command to margin, we items. have good

we past if will terms NP operating level. confident of pressure a And achieve we into in grow NP dollars a to margin better profit dollars, to in take grow we a the we well achieve compared terms much can are of as greater margin, a And on pretty years. a try the deleverage. our level better of then think flattish much that can profit as X we apparently, can as we the scale dollar can as as and we lot profit So

in of concern So on profile, we no margin actually. that the have terms

GP and have We of pretty amount margin margin. good both NP

Operator

Next of Nomura. line question the Jialong comes from Shi from

Jialong Shi

I So Language] have [Foreign questions. X

about is AI. generative question First

has the these So become AI popular a trend days.

cost? So wondering in this are provide management there AI improve can business profitability help some any color. just reduce where wonder may if either Just if or the areas

Super second and VIP And trend is wondering the shopping what the for question members? is frequency the ARPU of

Eric Shen

[Foreign Language]

Jessie Fan

into moving on cases. personalization, terms et application In including [Interpreted] number actually, application, Q&A internally, applications, very of recommendation, the fast generation AI of cetera, we invest product to AI are and a

of focus as to efficiency. DeepSeek opportunities productivity internally find as well try Specifically, as actually, are we to to improve deploying immediate The course, well. is,

integrated improve dialogues be that place our every can see reasoning trying of in taking on to example, For service customer are f-analysis and day. model DeepSeek many on the customer we're service, the to whether self-developed

any portfolio there campaigns improvement. on to opportunities launching new their our kind platform. whether also to to sales of business see actions tours to optimize promote trying them should analytical brand of to are take partners, is area try are merchandising they And help find We we maximize to if their what -- to

constantly broad not also an on although EXC see into are but business on the we the rolling latest we better out of are can we we are gen to our to So front, recommendation leverage And models the latest their more application upgrading to try even generation are our and Q&A, customers needs. the publicly, a to whether and internal and cases AI improve AI trying and more precisely model we AI and customer to deploying gen model make the basis.

we we are to and So and -- constant using basis on tracking and growth applications efficiency. are our drive AI look internal AI we find in cases, to opportunities leverage both developments the for business a to

To a Last year, on decline, ramp customer. of for annual did annual terms increase SVIP second new we of time see dilutive that's active VIP takes Super from up slight question your in -- some spending. member but takes SVIP impact normally more And it customers. the in to XX% his a ARPU, it

X-year we slight very cohort ARPU. actually, And our of ARPU of look at customer drop the only terms if a see hardcore remains SVIP in the customer We annual resilient. base,

we the consumer membership base that continuously overall the is and health So and SVIP we expand protect group. healthy, overall SVIP think the very the customer look to still of

Operator

remarks. this session. constraints, time time, you. to At for any question-and-answer turn to the concludes All back that today's right. closing Thank Jessie conference I'll Due

Jessie Fan

time join for us to taking Thank the today. you

quarter. you any you contact look next to to speaking with We questions, team. our have please forward don't IR If hesitate

Operator

does conclude today's Thank you conference. the This participation for in program. your

You disconnect. may now

spoken live [Interpreted] the transcript an of marked interpreter are that call.] [Portions on this were present by

Vipshop Holdings Limited (VIPS) 21 Feb 252024 Q4 Earnings call transcript