Vipshop Holdings Limited Q3 FY2025 earnings call

Core Customer Trends: Total active customers regained year-over-year growth. Super VIP membership continued double-digit growth; active super VIP customers grew 11% year-over-year in Q3, contributing 51% of online spending. ### Category Performance: Accelerated momentum in apparel-related categories via merchandising strategy highlighting high-value brands, trending categories, etc. ### Organizational Realignment: Strategically realigning organization for long-term success, focusing on reinforcing flywheel from merchandising, customer engagement to operation. ### Merchandising-Led: Competing via affordable and differentiated assortments, deepening category specialization, e.g., rebuilding maternal and child care division. ### Made for Vipshop: Delivered strong sales growth; deepening collaboration with high-value brand partners. ### Marketing Formats: Experimenting with new marketing formats like in-app content and short-form dramas. ### AI Application: Deploying AI agents in areas like search, recommendations, customer service, etc., with examples like try-on AI feature and AI ads.

Total net revenues for 2025 increased by 3.4% year-over-year to RMB21.4 billion from RMB20.7 billion in the prior year period. Gross profit was RMB4.9 billion compared with RMB5 billion in the prior year period. Gross margin was 23% compared with 24% in the prior year period. Income from operations was RMB1.26 billion compared with RMB1.33 billion in the prior year period. Operating margin was 5.9% compared with 6.4% in the prior year period. Non-GAAP income from operations was RMB1.6 billion compared with RMB1.7 billion in the prior year period. Non-GAAP operating margin was 7.5% compared with 8.2% in the prior year period. Net income attributable to Vipshop Holdings Limited shareholders increased by 16.8% year-over-year to RMB1.2 billion from RMB1 billion in the prior year period. Net margin attributable to Vipshop Holdings Limited shareholders increased to 5.7% from 5.1% in the prior year period. Non-GAAP net income attributable to Vipshop Holdings Limited shareholders increased by 14.6% year-over-year to RMB1.5 billion from RMB1.3 billion in the prior year period. Non-GAAP net margin attributable to Vipshop Holdings Limited shareholders increased to 7% from 6.3% in the prior year period.

For 2025, expect total net revenues to be between RMB33.2 billion and RMB34.9 billion, representing a year-over-year increase of approximately 0% to 5%.

Q: About the online shopping competitive landscape, including latest trend and potential impact from quick commerce, and monthly GMV momentum quarter to date, performance in October and November, and 2026 outlook.

A: On quick commerce, not going into it but focusing on convenience in supply chain management. For GMV, October and November show decent growth momentum, 11.11 period had decent year-over-year growth, expect Q4 to be positive, and for 2026, see opportunities in off-price retail for brands but expect normalized consumer sentiment, with roadmap for balanced growth and profitability.

Q: Elaborate on details, changes, and restructuring of merchandising team, and how AI helps financial growth.

A: Organizational changes realigned entire organization for agility and efficiency, replaced senior leaders in merchandising team, refreshed organization. AI helps in conversion via try-on feature, improves marketing efficiency via AI ads, and has potential in customer churn and engagement.

Q: Operation related, operating profit and margin decline, when and if operating margin and profit can return to positive year-on-year growth; and about Hong Kong listing.

A: Gross margin decline due to customer incentives, expect gross profit margin to be comparable to 2024 level around 23% in long term. On Hong Kong listing, closely following capital market changes, will update if there is progress.

Q: Active customer number and revenue growth turned positive, expected sequential improvement in Q4, investment plans and operational focus for users and customers, and shareholder return program for next year.

A: Expect customer growth to accelerate in Q4, investment in new marketing formats and channel investment to acquire new customers. For shareholder return, will continue to invest in business to grow profit and generate cash for dividends and buyback, evaluate appropriate level next year.