Baozun Inc (ADR) (BZUN) Shares Take a Hit; Here’s Why
Baozun's 2Q Earnings Failed to Meet Street's Expectations, Shares Tumble 15%
Baozun Inc (ADR) (NASDAQ:BZUN) investors hit the panic button today, after the Chinese information technology firm reported second-quarter earnings that fell short of analysts’ forecasts. Specifically, diluted net income attributable to Baozun ordinary shareholders per American Depository Share was $0.08, compared to consensus estimates of $0.10.
Baozun CEO Vincent Qiu commented, “We are pleased to report another quarter of strong financial and operational results driven primarily by robust growth from our existing online stores and the further optimization of our business model […] Technology is the key to our success and the rapid expansion of our business and service offerings. To further increase our competitive advantage, we established an innovation center during the quarter to focus on enhancing our IT capabilities and expanding the scale of our technology services. We will continue to invest in building our long-term technological competitive advantage to further reinforce our market leading position in China’s brand e-commerce market.”
CFO Beck Chen added, “We are very proud to deliver another solid quarter of growth with GMV increasing by 63.5% year-over-year. Brands under our non-distribution model performed particularly well, with non-distribution GMV continuing to grow at an even faster rate of 80.9%. We are further optimizing our business model mix towards the non-distribution model by transitioning one of our largest brand partners. As more business is transitioned to the non-distribution model, we expect product sales revenue will be impacted over the next few quarters while services revenue is expected to continue growing rapidly alongside an improving gross margin. We also witnessed a significant increase in non-GAAP net income attributable to ordinary shareholders of Baozun Inc., which grew by more than four times when compared to the same period last year.”
Shares of Baozun are currently trading at $29.28, down $5.32 or -15.38%. BZUN has a 1-year high of $35.91 and a 1-year low of $9.57. The stock’s 50-day moving average is $30.89 and its 200-day moving average is $20.80.
Baozun is a holding company, which engages in the provision of electronic commerce (e-commerce) services and solutions. It operates through the Brand E-Commerce and Maikefeng segments. The Brand E-Commerce segment provides e-commerce solutions to brand partners, including information technology services, store operations, digital marketing, customer services, warehousing, and fulfillment. The Maikefeng segment manages the retail online platform, Maikefeng.