JD.com shares fall 9% on weak retail growth despite Q2 earnings beat
Chinese e-commerce giant posts better-than-expected profits but warns of sluggish consumer demand as shares drop sharply.
Shares of JD.com (9618.HK) fell as much as 9% on Thursday after the Chinese e-commerce leader posted second-quarter earnings that beat market expectations but flagged persistent weakness in retail sales.
The company reported net income of 6.8 billion yuan ($950 million) for the quarter ended June 30, up 24% year-on-year and exceeding analyst forecasts. Revenue rose 3.8% to 263.6 billion yuan, also topping estimates. However, JD’s core retail business, which accounts for the bulk of its revenue, grew just 2.3% in the period, down from 5.6% in the first quarter.
JD.com attributed the slowdown to softer consumer spending amid China’s prolonged property downturn and cautious household budgets. Management noted that while high-margin businesses such as electronics and home appliances performed better, demand for discretionary goods remained subdued.
The earnings report comes as China’s retail sector grapples with weak consumer confidence, a key drag on broader economic recovery. JD’s logistics and technology services, which include cloud computing and AI-driven supply chain solutions, posted stronger growth, rising 12% year-on-year.
Analysts at CICC and Goldman Sachs maintained neutral ratings on JD.com following the results, citing concerns over margin pressure and competitive intensity in the e-commerce space. The stock’s decline reflects broader investor caution toward Chinese consumer-facing companies amid regulatory scrutiny and economic headwinds.
JD.com’s shares have underperformed the Hang Seng Tech Index by nearly 15% over the past month, underscoring the challenges facing the sector.
Priya covers listed equities and corporate earnings, reading quarterly results and guidance for what they signal about sector health and forward valuations.
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