Shares of Baozun Inc. Slide 12% Despite First-Quarter Results Showing Solid Growth

What happened

Shares of Baozun Inc. (NASDAQ: BZUN), a leading-brand e-commerce service partner in China, released its financial results for the first quarter, prompting a questionable 12% slide in share price.

So what

Starting from the company's top line: Total net revenues checked in at RMB 804.9 million, or $116.9 million, which was a solid 20.5% increase compared to the prior year's result. That was just better than analysts' estimates calling for RMB 802.9 million. The company met estimates on the bottom line too, with non-GAAP (generally accepted accounting principles) net income per share checking in at RMB 0.50, or $0.07. There were some other highlights as well, including total gross merchandise volume (GMV) rising 60.5% compared to the prior year, to RMB 2,974.4 million.

Image source: Getty Images.

Said Vincent Qiu, chairman and CEO of Baozun, in a press release (italics are in original):

Now what

BZUN data by YCharts.

It's possible that despite the solid quarter, the market simply wasn't willing to sustain the company's lofty valuations after anything less than a blockbuster result. One slight knock against the results was rising costs -- including sales and marketing expenses, technology and content expenses, and fulfillment expenses -- but that's not unexpected from a young company growing quickly.

Looking ahead, the company will focus on its core vertical channels, offering more value to its brand partners through global expansion.

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Daniel Miller has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.