Dingdong(US:DDL)2023-05-13 08:46Financial Data and Key Metrics Changes - In Q1 2023, GMV was RMB5.45 billion, down 6.8% year-over-year, while revenue was RMB5 billion, down 8.2% compared to the previous year [6][15] - The gross margin improved to 30.7%, up 2 percentage points year-over-year [16] - Non-GAAP net margin optimized by 7.9 percentage points from a year ago, achieving non-GAAP breakeven in Q1 [18] Business Line Data and Key Metrics Changes - Average order volume per station increased by 7.7% year-over-year, and order frequency per user rose by 13.8% [7] - Private label prepared food accounted for 19% of total GMV, with over 70% increase in private label penetration [11] - Sales from the Qingyang Planet page contributed to 7.4% of GMV in Q1 [12] Market Data and Key Metrics Changes - GMV in East China region increased by 6.3% year-over-year, indicating significant regional growth [8][15] - The decline in overall GMV was attributed to the high base from the previous year due to pandemic-related lockdowns [6][15] Company Strategy and Development Direction - The company shifted its strategy from subsidies and discounted pricing to focusing on product quality and brand trust [8][27] - The new growth flywheel emphasizes building user mind share through high-quality products, which is expected to drive long-term growth [27][28] - Plans to expand into non-fresh grocery categories to enhance brand image and improve gross margins [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of seasonal factors and increased travel during the Chinese New Year on Q1 sales [9] - The company remains confident in achieving non-GAAP profitability for both Q2 and the full year of 2023 [14][19] - Management emphasized the importance of product development and maintaining a focus on quality to navigate competitive pressures [36] Other Important Information - The company ended the quarter with RMB5.7 billion in cash and equivalents, indicating strong financial stability [19] - The operational strategy is designed to create a sustainable competitive advantage through superior product development and quality control [36] Q&A Session Summary Question: Has the company returned to a growth trajectory in sales, and how will it balance sales and profit in the future? - Management explained that the decline in sales was due to a high base from the previous year and the exit from unprofitable cities, but they are confident in long-term growth through quality product focus [21][22][23] Question: Can you elaborate on the new growth flywheel and its driving force? - The new growth flywheel focuses on building user mind share through high-quality products, which will lead to increased purchase frequency and profitability [25][27][28] Question: What is the next step for the development of prepared foods, and is this category profitable? - Prepared food products are designed to be healthy and delicious, and the category is proving to be profitable with plans for further expansion and innovation [31][33] Question: Can you comment on the current competitive landscape and the company's competitive advantages? - Management emphasized a collaborative approach rather than viewing others as competitors, highlighting strong product development and financial stability as key advantages [35][36]