Mogu Stock Inches Lower on Stagnant User Growth

The fashion and lifestyle platform reported increased revenue and narrowed income for the fourth quarter but failed to grow its user base.

Author: Belinda Zhou   

Mogu Inc. (NYSE: MOGU) reported increased revenue but stagnant user numbers for the fourth quarter and fiscal year 2019, seeing its stock drop 1 percent to $4.92 per American depositary share intraday Thursday.

In a statement today, Mogu said its revenue in the three months through March reached $32.4 million, representing a year-over-year increase of 16 percent. In the fiscal year 2019, revenue rose 10 percent to $160.1 million.

The Hangzhou-based online fashion and lifestyle platform said its quarterly net loss has narrowed by 21 percent to $10.1 million, or 20 cents per ADS, from a year ago. Its net loss reached $35.7 million, or $3.24 per ADS, in the fiscal year 2019, down 43 percent from fiscal year 2018.

Mogu's year-over-year sales data for the twelve-month period ended March showed positive growth momentum. Gross merchandise value of Mogu, the total value of orders placed on the Mogu platform, rose up 19 percent to $2.6 billion from the fiscal year 2018.

However, the company's active users in the twelve months through March remained nearly unchanged, at 32.8 million.

The company said its live video broadcast business contributed most of the revenue. "The increase in commission revenues was driven by growth in GMV and higher commission rate from live video broadcasts and prime service offerings as they increasingly contribute a higher proportion of GMV," Helen Wu, the chief financial officer of Mogu, said in the report.

"During the past quarter, we continued to expand, optimize, and elevate the supply chain for our fashion ecosystem by enriching content, increasing user engagement on our live video broadcasts, and facilitating more repeat repurchases," Qi Chen, the chief executive officer of Mogu, said.

Mogu, backed by Tencent Holdings Ltd. (HKEX: 0700), lost about 65 percent of its market value after its debut in New York in December. Mogu offered its shares at $14 apiece and sold 4.75 million ADSs, raising $66.5 million in its float.

Looking ahead, the company said it will continue to strengthen the three-way fashion eco-system by growing content creation community of fashion key opinion leaders and live video broadcast hosts, elevating the supply chain and supporting collaboration between merchants and KOLs, and facilitating user and community engagement.

"We are confident that these initiatives will drive KOL-generated GMV across our platform going forward," Chen said.