Chinese retail giant JD.com has booked “solid” earnings and sales in its first-quarter, thanks to an increase in user engagement and the addition of new brands, and is forecasting growth in its next quarter.
Net revenues for the three months ended 31 March amounted to CNY146.2bn (US$120.6bn), an increase of 20.7% on the year prior. The cost of revenues, meanwhile, were up 20.2%, primarily due to the growth of the company’s online retail business and third-party logistics services.
General merchandise sales grew 38.2% to CNY52.5bn. JD.com’s e-commerce platform introduced 20 luxury brands in January, including leather goods house Delvaux, Italian fashion brand MSGM, and Canadian outerwear brand Mackage.
Net income in the quarter reached CNY1.1bn, compared to CNY7.3bn for the same period last year. Non-GAAP earnings amounted to CNY3bn from CNY3.3bn a year prior, while income from operations almost doubled to CNY2.3bn from CNY1.2bn.
“JD’s resilient business model helped drive solid top and bottom-line results for the quarter that exceeded our expectations,” said CFO Sidney Huang. “We are also pleased to see an accelerating increase in user engagement, demonstrating our strengthened brand image and expanded consumer mindshare. Throughout the Covid-19 outbreak, JD has implemented disciplined financial control policies while providing undisrupted and timely services to consumers. We will continue to invest in technology and customer experience to support our future growth.”
To support the global fight against Covid-19, JD.com donated nearly 10m pieces of medical supplies including face masks, ventilators, protection suits, and protective goggles to a number of overseas countries.
For the second quarter, net revenues are expected to be between CNY180bn and CNY195bn, representing a growth rate of between 20% and 30% compared with the second quarter of 2019.