Vipshop Holdings reported second-quarter 2026 earnings that fell short of analyst expectations, sending shares down 2.9% in premarket trading to $13.90.
The Chinese e-commerce group posted adjusted earnings of $2.91 per American Depositary Share (ADS), missing the $3.94 estimate by 26.1%. Revenue totaled $24.71 billion, slightly below the $24.88 billion forecast. Total net revenues in RMB declined 4% year-over-year to RMB 24.7 billion, reflecting a challenging retail environment.
Gross profit fell to RMB 5.8 billion from RMB 6.1 billion in the prior-year period, with gross margin narrowing to 23.3% from 23.5%. Operating income decreased to RMB 1.5 billion under GAAP, while non-GAAP operating income declined to RMB 2.0 billion. The company attributed the shortfall to softer consumer demand and heightened promotional competition.
Net income attributable to shareholders surged 189% year-over-year to RMB 4.3 billion, driven by a one-off investment gain of RMB 5.79 billion from the listing of a commercial real estate investment trust (REIT) by subsidiary Shan Shan Commercial Group. Excluding this item, non-GAAP net income fell to RMB 392.2 million, with a net margin of 1.6% compared to 8.0% a year earlier.
Tax expenses rose to RMB 3.3 billion, up from RMB 407.2 million, due to a RMB 1.63 billion charge tied to the REIT listing and a RMB 1.56 billion withholding tax accrual on historical dividend distributions.
Shan Shan Outlet, acquired in 2019, expanded to 22 malls and listed a commercial REIT on the Shanghai Stock Exchange in June, raising RMB 7.7 billion—the largest scale among China’s first batch of commercial REITs. The segment’s gross merchandise value grew over 20% in the first half, with comparable same-store sales expected to rise by at least double digits in the second half.
Management reaffirmed its commitment to returning at least 75% of 2025 non-GAAP net income to shareholders, having distributed approximately $400 million in the first half of 2026. The board also approved a new $1 billion share repurchase program.
Looking ahead, Vipshop guided third-quarter revenue to decline 5% to flat year-over-year, with full-year revenue expected to decline slightly versus 2025. CEO Eric Shen noted persistent consumer caution, stating, "They are very value-seeking and highly selective," while emphasizing the company’s focus on curated, deeply discounted brand products.
