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What:Shares of Vipshop Holdings Ltd - ADR were up 14.5% as of 2:30 p.m. Tuesday after the Chinese online discount retailer announced better-than-expected fourth-quarter results.
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So what:Quarterly revenue climbed 108.9% year over year to $1.36 billion, driven by a 114.2% increase in the number of active customers, and a 99.6% increase in total orders to 35.3 million. That translated to net income of $0.09 per diluted American depositary share. Analysts, on average, were expecting earnings of $0.09 per share on lower sales of $1.23 billion.
Now what: For the current quarter, Vipshop expects total revenue between $1.25 billion and $1.30 billion, or growth of roughly 78%-85% over the year-ago period. The midpoint of that range falls above analysts' expectations for sales of just $1.22 billion.
Vipshop CEO Eric Shen explained much of the solid growth has been driven by the company's efforts to improve its mobile shopping experience. "As mobile is increasingly becoming the ideal solution for e-commerce users," Shen elaborated, "we believe our flash sales model, which allows shoppers to act instantly on sales events any time and anywhere, is particularly well suited for users shopping via mobile devices."
In the end, given Vipshop's rapid growth, the massive opportunity for e-commerce in China, and with shares currently trading at a reasonable 30 times this year's expected earnings as of this writing, I can't blame the market for bidding up Vipshop stock Tuesday.
The article Why Vipshop Holdings Ltd - ADR Popped Today originally appeared on Fool.com.
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