On August 20th, Vipshop released its Q2 2024 financial report. According to the financial report, Vipshop achieved a net revenue of 26.9 billion yuan (RMB) in the second quarter of this year, with a net profit of 2.2 billion yuan under non US accounting standards; The GMV (Gross Merchandise Volume) was 50.6 billion yuan, unchanged from the same period last year. The number of active users of Super VIP (SVIP) increased by 11% year-on-year, contributing 47% of online consumption.
In the second quarter of this year, Vipshop invested over $200 million to repurchase the company's stock, accelerating the pace of stock repurchases. Based on confidence in the future development of the company, the Board of Directors of Vipshop has approved a new stock repurchase plan, allowing the company to repurchase up to $1 billion of American Depositary Shares or Class A common shares within 24 months after completing the existing stock repurchase plan.
Vipshop Chairman and CEO Shen Ya stated that Vipshop is focused on enhancing the inherent advantages of its brand's special selling model. Next, we will continue to deepen our efforts in enriching the supply of goods, providing cost-effective products, and ensuring worry free services, with a focus on achieving long-term and sustainable growth.
Vipshop Q2 2024 Performance
SVIP active users increased by 11% year-on-year, contributing 47% of online consumption
Financial report data shows that in the second quarter of this year, Vipshop's revenue was 26.9 billion yuan, compared to 27.9 billion yuan in the same period last year. GMV506 billion yuan, basically unchanged from the same period last year. The gross profit increased by 2.2% year-on-year to 6.3 billion yuan, higher than the 6.2 billion yuan in the same period last year. Net profit was 1.9 billion yuan, compared to 2.1 billion yuan in the same period last year. Non GAAP net profit of 2.2 billion yuan. The number of active customers was 44.3 million, compared to 45.6 million in the same period last year. The total order volume in the second quarter was 197.8 million, compared to 213.8 million in the same period last year.
Although several indicators have declined, the SVIP user base of the platform's basic user disk continues to grow. In the second quarter of this year, the platform's Super VIP (SVIP) active users increased by 11% year-on-year, contributing 47% of online consumption.
This growth is also the result of multiple efforts. It is reported that Vipshop provides SVIP members with long-term and stable deep discounts, as well as rich membership benefits and value-added services, continuously improving the member experience. In the second quarter of this year, for SVIP members, the company will continue to enrich differentiated and cost-effective cargo pallets, increase exclusive promotional events, and strengthen the perception of member rights.
Among them, the platform has launched multiple online private sales activities, bringing SVIP members exclusive good prices for domestic and foreign top brand products. At the same time, the platform has added limited time welfare coupon packages for SVIP members, such as Starbucks, Heytea, and Himalaya. Vipshop has also launched a 1+1 equity joint card in collaboration with platforms such as Tencent, iQiyi, and Central Video through SVIP.
The management of Vipshop stated that in Q2 and Q3, the company will continue to increase its investment in S VIP and will continue to convert more non SVIP into SVIP. Consolidating SVIP firmly is our long-term strategy. Our SVIP disks are basically stable, and we hope to continue to increase and expand them
Huatai Securities analysis pointed out that Vipshop's super VIP members have demonstrated strong resilience among core users. Although the company may face some short-term growth pressure in the third quarter due to a high base, the continuously optimized shareholder return measures are expected to support its valuation attractiveness.
A new round of $1 billion repurchase plan
As of June 30, 2024, Vipshop has cash, cash equivalents, and restricted cash of 21.6 billion yuan, with short-term investments of 1.9 billion yuan. As of the end of the second quarter, the company generated a net cash flow of 287.1 million yuan from operating activities.
With ample cash, Vipshop has accelerated its stock buyback pace, investing over $200 million in buybacks in the second quarter of this year. As of June 30, 2024, the company still has $330.3 million in unused funds under its existing $1 billion stock repurchase plan.
According to the latest announcement, the company plans to repurchase up to $1 billion of American depositary shares or Class A common stock within 24 months after completing its existing stock repurchase plan. Roughly calculated, the repurchase amount of $1 billion is close to 16% of the current market value of Vipshop.
It is worth mentioning that the platform actively practices energy conservation and carbon reduction, and continues to carry out public welfare projects such as rural revitalization. In the first half of this year, Vipshop will continue to promote carbon reduction in its own operations and value chain, with the commitment goal of achieving carbon neutrality in its own operations no later than 2030 and a 50% reduction in carbon emissions intensity in the three categories no later than 2030.
Among them, by deploying photovoltaic power generation in multiple logistics parks and Shanshan Outlet stores, Vipshop's total photovoltaic power generation exceeded 12000 megawatt hours in the second quarter, equivalent to reducing carbon emissions by over 7000 tons; Pushing suppliers to consolidate package shipments and reduce unnecessary packaging material consumption, this measure saved over 810000 packages in the second quarter.
In recent years, Vipshop has launched a series of public welfare projects such as "Love Mom", "Love Love Charity Plan", and "Rural Revitalization in Longtou", and has continued to carry out the "One Warehouse, One Village" rural revitalization public welfare project by combining the advantages of logistics centers and storage locations in various regions to assist surrounding villages. As of the end of the second quarter of this year, Vipshop has invested a total of 745 million yuan in public welfare.
