JD.com (JD) posted better-than-expected first quarter earnings Tuesday as active users neared 600 million amid a resurgence in online retail activity following Covid-triggered lockdowns in some of China biggest cities.
JD.com said diluted non-GAAP earnings for the three months ending in March came in at 2.53 Chinese yuan per share, well ahead of the consensus forecast of 1.62 yuan per share and a 2.5% increase from the same period last year. Group revenues rose 18% from last year to 239.7 billion yuan ($35.6 billion) and were also ahead of the Street consensus forecast of $35.1 billion.
Active customer accounts across its platform jumped 16.2% to 580.5 million over the 12 month period ending in March, JD.com said, while marketing expenses were up 24.4% to just over $1.4 billion following the addition of big names such as Starbucks (SBUX) and Unilever (UL) to the platform's line-up last year.
“JD.com’s robust supply chain capabilities and technology-driven operating efficiency underpinned our solid performance during the quarter as we continued to deliver healthy growth amidst a challenging external environment,” said CEO Lei Xu. “More importantly, we are actively leveraging our core competences to support local communities and enterprises in regions affected by the latest Omicron outbreak."
"All of our employees are committed to fulfilling our social responsibilities and are encouraged by the deepening trust placed in us by customers and business partners," he added. "We will continue to demonstrate our resolve, resiliency and commitment to contribute to society.”
JD.com's U.S.-listed shares were marked 9.1% higher in early trading immediately following the earnings release to change hands at $56.32 each, a move that would trim the stock's year-to-date decline to around 17.7%.
JD.com shares, however, have been in steady decline since the China-based gaming and social media group Tencent Holdings (TCHEY) dumped $16.4 billion shares in the e-commerce group amid Beijing's broad crackdown on the country's powerful tech sector late last year.
Tencent unveiled plans to transfer most of its JD.com stake -- around 457.3 million Class A shares -- to existing shareholders in the form of a dividend on December 23, cutting its holding from 17% to around 2.3%, leaving Walmart (WMT), with a 9.3% stake, as JD.com's biggest investor.
A long-running dispute with the Securities and Exchange Commission over auditing standards also threatens to derail its U.S. listing, along with around 80 other China-based firms, in a drive for stricter compliance lead by the U.S. Public Company Accounting Oversight Board.
