Vipshop(VIPS) - 2024 Q1 - Quarterly Report

Fourth Quarter and Full Year 2023 Highlights Vipshop achieved significant year-over-year growth in key financial and operational metrics for both Q4 and the full year 2023, including GMV, net revenues, and net income Q4 2023 Key Performance Indicators (YoY Growth) | Metric | Q4 2023 Value | YoY Growth | | :--- | :--- | :--- | | Total Net Revenues | $34.7 billion | +9.2% | | GMV | $66.4 billion | +21.9% | | Gross Profit | $8.2 billion | +19.3% | | Net Income (Attributable) | $3.0 billion | +32.2% | | Non-GAAP Net Income (Attributable) | $3.2 billion | +43.4% | | Active Customers | 48.5 million | +2.3% | | Total Orders | 234.3 million | +7.2% | Full Year 2023 Key Performance Indicators (YoY Growth) | Metric | Full Year 2023 Value | YoY Growth | | :--- | :--- | :--- | | Total Net Revenues | $112.9 billion | +9.4% | | GMV | $208.0 billion | +18.7% | | Gross Profit | $25.7 billion | +19.0% | | Net Income (Attributable) | $8.1 billion | +28.9% | | Non-GAAP Net Income (Attributable) | $9.5 billion | +39.1% | | Active Customers | 87.4 million | +3.9% | | Total Orders | 812.3 million | +9.8% | Management Commentary Management attributed strong 2023 results to effective merchandising, achieving record profitability and GMV, and initiating an annual dividend policy to enhance shareholder returns - CEO Eric Shen highlighted that the company's strategy focusing on discount retail for brands paid off, leading to increased customer loyalty, double-digit growth in active Super VIP members, and annual GMV crossing $200 billion for the first time[5] - CFO Mark Wang noted that 2023 was the most profitable year in Vipshop's history, driven by efficiency improvements, and announced the board's approval of an annual cash dividend policy, reflecting confidence in future growth and commitment to shareholder value[5] Fourth Quarter 2023 Financial Results Vipshop's Q4 2023 financial performance showed robust growth in total net revenues, significant improvements in gross and operating margins, and a substantial increase in net income attributable to shareholders Q4 2023 Financial Performance vs. Q4 2022 | Financial Metric | Q4 2023 | Q4 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total Net Revenues | $34.7B | $31.8B | +9.2% | | Gross Profit | $8.2B | $6.9B | +19.3% | | Gross Margin | 23.7% | 21.7% | +2.0 p.p. | | Income from Operations | $3.7B | $2.5B | +46.2% | | Operating Margin | 10.6% | 7.9% | +2.7 p.p. | | Net Income (Attributable) | $3.0B | $2.2B | +32.2% | | Diluted ADS | $5.35 | $3.66 | +46.2% | Q4 2023 Operating Expenses Analysis | Expense Category | Amount ($) | % of Revenues | YoY Change | | :--- | :--- | :--- | :--- | | Fulfillment Expenses | $2.5 billion | 7.3% | +17.0% | | Marketing Expenses | $843.2 million | 2.4% | -10.7% | | Technology & Content | $496.4 million | 1.4% | +21.5% | | General & Administrative | $1.0 billion | 2.9% | -11.7% | | Total Operating Expenses | $4.9 billion | 14.0% | +4.8% | - As of December 31, 2023, the company held $26.3 billion in cash, cash equivalents, and restricted cash, and $2.0 billion in short-term investments[16] - Net cash generated from operating activities in Q4 2023 was $8.7 billion, a significant increase from $6.5 billion in Q4 2022[16][17] Full Year 2023 Financial Results Vipshop's full year 2023 results showed a 9.4% increase in total net revenues, significant improvements in gross and operating margins, and substantial growth in both GAAP and non-GAAP net income Full Year 2023 Financial Performance vs. Full Year 2022 | Financial Metric | Full Year 2023 | Full Year 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total Net Revenues | $112.9B | $103.2B | +9.4% | | Gross Profit | $25.7B | $21.6B | +19.0% | | Gross Margin | 22.8% | 21.0% | +1.8 p.p. | | Income from Operations | $9.1B | $6.2B | +46.9% | | Operating Margin | 8.1% | 6.0% | +2.1 p.p. | | Net Income (Attributable) | $8.1B | $6.3B | +28.9% | | Diluted ADS | $14.42 | $9.83 | +46.7% | Full Year 2023 Non-GAAP Performance vs. Full Year 2022 | Non-GAAP Metric | Full Year 2023 | Full Year 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Non-GAAP Income from Operations | $10.6B | $7.4B | +43.3% | | Non-GAAP Operating Margin | 9.4% | 7.2% | +2.2 p.p. | | Non-GAAP Net Income (Attributable) | $9.5B | $6.8B | +39.1% | | Non-GAAP Diluted ADS | $16.90 | $10.67 | +58.4% | - For the full year 2023, net cash generated from operating activities was $14.4 billion, up from $10.5 billion in 2022, and free cash inflow increased to $9.3 billion from $7.8 billion in the prior year[22][23] Shareholder Returns Vipshop is enhancing shareholder value through ongoing share repurchases and the introduction of a new annual cash dividend policy, demonstrating confidence in future performance - Under its $1 billion share repurchase program (effective through March 2025), the company repurchased $3.4 million of its ADSs in Q4 2023, leaving an unutilized amount of $548.1 million[24] - On February 22, 2024, the board adopted an annual cash dividend policy[25] 2023 Annual Dividend Details | Metric | Value | | :--- | :--- | | Dividend per Ordinary Share | $2.15 | | Dividend per ADS | $0.43 | | Total Payout Amount | Approx. $250 million | | Record Date | March 15, 2024 | | Payment Date | April 8, 2024 | Business Outlook Vipshop forecasts Q1 2024 total net revenues to range between $27.5 billion and $28.9 billion, representing a year-over-year growth of approximately 0% to 5% - The company expects total net revenues for Q1 2024 to be between $27.5 billion and $28.9 billion[27] - This revenue guidance represents a year-over-year increase of approximately 0% to 5%[27] Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including statements of income, balance sheets, and GAAP to Non-GAAP reconciliations for Q4 and full year 2023 - Presents the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and twelve months ended December 31, 2023, compared to the same periods in 2022[35][36] - Includes the Unaudited Condensed Consolidated Balance Sheets as of December 31, 2023, compared to December 31, 2022[38][39] - Provides detailed reconciliations of GAAP financial measures to their corresponding Non-GAAP measures, such as income from operations and net income attributable to shareholders[40]