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Vipshop (VIPS) to Report Q2 Earnings: What's in the Offing?

Zacks Equity Research
·4 min read

Vipshop Holdings Limited VIPS is set to report second-quarter 2020 results on Aug 19. In the last reported quarter, the company delivered an earnings surprise of 122.2%.

It topped the Zacks Consensus Estimate in all the trailing four quarters, delivering an average earnings surprise of 61.6%.

Second-Quarter Expectations

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is currently pegged at 28 cents per share, indicating an increase of 21.7% from the year-ago reported figure.

The Zacks Consensus Estimate for revenues is pegged at $3.42 billion, indicating an increase of 3.2% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Performance in the Last Reported Quarter

Vipshop reported first-quarter 2020 non-GAAP earnings of 20 cents per share, which beat the Zacks Consensus Estimate by 11 cents.

Revenues of $18.8 billion (US$2.7 billion) in the last reported quarter were down 11.7% year over year.

Vipshop Holdings Limited Price and EPS Surprise

Vipshop Holdings Limited Price and EPS Surprise
Vipshop Holdings Limited Price and EPS Surprise

Vipshop Holdings Limited price-eps-surprise | Vipshop Holdings Limited Quote

Factors at Play

Due the global coronavirus-driven economic crisis, Vipshop’s second-quarter sales might have been affected. The company’s apparel category, which has been impacted by the coronavirus outbreak, is expected to have witnessed a decrease in demand.

Nevertheless, its persistent efforts toward strengthening product offerings and improving product procurement are likely to reflect on second-quarter results, given the secular trend in the online shopping market. Further, solid execution of Vipshop’s merchandising strategy is likely to have bolstered total active customer base in the to-be-reported quarter.

Moreover, its successful transition to discount retailing might have been a major positive. This is likely to have driven momentum across repeat customers and helped it in attracting new ones.

Also, the company took the necessary steps to curtail costs in the quarter. This should have helped it generate solid gross margins.

However, intensifying competition in the online shopping market — which resulted in an increase in sales and marketing spending — is likely to get reflected in the company’s second-quarter results.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Vipshop this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Vipshop has an Earnings ESP of 0.00% and a Zacks Rank #3, at present.

Stocks to Consider

Here are some stocks you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Deere & Company DE has an Earnings ESP of +4.64% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

JD.com, Inc. JD has an Earnings ESP of +13.79% and a Zacks Rank #1.

The Home Depot, Inc. HD has an Earnings ESP of +17.13% and a Zacks Rank #2.

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Deere Company (DE) : Free Stock Analysis Report
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Vipshop Holdings Limited (VIPS) : Free Stock Analysis Report
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