Why Discount Retailer Vipshop Shares Are Jumping Today

Vipshop Holdings Limited VIPS shares are trading higher on Wednesday.

The company reported fourth-quarter adjusted earnings per ADS of 82 cents, surpassing the analyst consensus of 71 cents.

Quarterly revenues of $4.88 billion beat the analyst consensus of $4.69 billion.  Sales increased 9.2% year over year on growth in active customers and spending driven by the recovery in consumption of discretionary categories.

GMV for the fourth quarter of 2023 increased by 21.9% year over year. Total orders increased 7.2% year over year to 234.3 million from 218.5 million in the prior year.

Gross profit for the fourth quarter increased by 19.3% year over year to $1.2 billion. Gross margin for the quarter increased to 23.7% from 21.7% in the prior year.

The number of active customers for the fourth quarter increased by 2.3% year over year to 48.5 million from 47.5 million a year ago. 

“Apparel categories continued to fuel our growth and outperformed the industry average all year long..,” said Eric Shen, Chairman and Chief Executive Officer of Vipshop.

As of December 31, 2023, the company had cash and equivalents worth $3.9 billion.

“We have made great progress in merchandise expansion and value-for-money perception. This has been instrumental in increased customer loyalty and double-digit growth in active Super VIP members,” Shen added.

Dividend: For the fiscal year of 2023, the board of directors of the company declared a dividend of $2.15 per ordinary share, or $0.43 per ADS.

The aggregate amount of cash dividends to be paid will be approximately $250 million, which is expected to be paid on April 8, 2024.

Outlook: For the first quarter of 2024, the company expects its total net revenues to be between RMB27.5 billion and RMB28.9 billion (0% to 5% increase year over year).

Price Action: VIPS shares are trading higher by 12.9% to $19.57 on the last check Wednesday.