Shares in E-commerce Services Provider Baozun Slide After Earnings

Shares in the Shanghai-based company closed at $38.89, down 55 cents, or 1.4 percent, as revenue and earnings came in slightly below analysts' expectations.

Author: Lucas Hahn   

Baozun Inc. (Nasdaq: BZUN) stock fell today after the e-commerce services company reported revenue and earnings that fell slightly below analysts' expectations.

Shares in the Shanghai-based company closed at $38.89, down 55 cents, or 1.4 percent.

"We closed out the year strongly with solid financial and operational results driven primarily by strong growth from existing online stores, improved efficiency as a result of the application of innovative proprietary technologies and tools, and growth in our digital marketing services," said Vincent Qiu, Baozun's chairman and CEO.

Revenue for the quarter ended Dec. 31 rose 41 percent year-over-year to $320.3 million. According to Qiu, revenue during the fourth quarter of 2018 grew at at the fastest pace in three years.


Net income attributable to ordinary shareholders grew 28.4 percent to $27.4 million, or 46 cents per fully diluted ADS. Each Baozun ADS represents three Class A shares.

Analysts had expected 57 cents per share in earnings and revenue of $327.7 million, according to Yahoo! Finance.

"We strongly believe that the e-commerce industry and the digitization of retail industry will continue to grow at a faster pace than the overall economy, which we are ideally positioned to benefit from," Qiu said during today's earnings call.

The company said it expects its first-quarter gross merchandise value (GMV) will grow 55 to 60 percent year-over-year, with revenue up 36 to 41 percent, ranging between 1.25 billion yuan and 1.3 billion yuan.

The company also expects gross merchandise value for fiscal 2019 to increase 40 to 50 percent, bringing in 7.2 billion yuan in revenue.

Baozun, which was founded in 2007, has been likened to Shopify; the company helps global brands in a variety of industries sell to China with online stores. Baozun's customers include Microsoft, Philips, Panasonic, and Calvin Klein.

Alibaba Group Holding Ltd. (NYSE:BABA) has invested in the company and remains one of its largest shareholders. Baozun stock went public on the New York Stock Exchange in May 2015 at $10 per share.

Analysts rate the company stock a buy, with an average price target of $46.89, representing 20.6 percent above today's closing price. Baozun stock is up 37.8 percent year-to-date.