Baozun Inc. (Nasdaq:BZUN) ("Baozun" or the "Company"), the leading
brand e-commerce service partner that helps brands execute their
e-commerce strategies in China, today announced its unaudited
financial results for the first quarter ended March 31, 2017.
First Quarter 2017 Financial
Highlights
- Total net revenues were RMB804.9 million (US$1116.9 million),
an increase of 20.5% year-over-year.
- Net income attributable to Baozun ordinary shareholders was
RMB10.6 million (US$1.5 million), an increase of 157.4%
year-over-year.
- Non-GAAP net income attributable to Baozun ordinary
shareholders2 was RMB28.9 million (US$4.2 million), an
increase of 104.0% year-over-year.
- Basic and diluted net income attributable to Baozun ordinary
shareholders per American Depository Share (“ADS3”) were RMB0.20
(US$0.03) and RMB0.18 (US$0.03), respectively, compared with basic
and diluted net income attributable to Baozun ordinary shareholders
per ADS of RMB0.09 for the same period of 2016.
- Basic and diluted non-GAAP net income attributable to Baozun
ordinary shareholders per ADS were RMB0.54 (US$0.08) and RMB0.50
(US$0.07), respectively, compared with basic and diluted non-GAAP
net income attributable to Baozun ordinary shareholders per ADS of
RMB0.29 and RMB0.27, respectively, for the same period of
2016.
First Quarter 2017 Operational
Highlights
- Total Gross Merchandise Volume (“GMV”)4 was RMB2,974.4
million, an increase of 60.5% year-over-year.
- Distribution GMV5 was RMB580.1 million, an increase of
7.2% year-over-year.
- Non-distribution GMV6 was RMB2,394.3 million, an increase
of 82.5% year-over-year.
- Number of brand partners increased to 136 as of March 31, 2017,
from 116 as of March 31, 2016.
- Number of GMV brand partners increased to 125 as of March 31,
2017, from 98 as of March 31, 2016.
“Our business continued to gain growth momentum
with another strong quarter,” commented Mr. Vincent Qiu, Chairman
and Chief Executive Officer of Baozun. “On May 11, 2017, we held
the second Global Brand E-commerce Summit in Shanghai with more
than five hundred participants in attendance to discuss the future
of the brand e-commerce industry. The theme of this year’s
conference was Bounded but Boundless Omni-marketing. We
remain committed to finding more innovative ways to provide our
brand partners with best-in-class e-commerce solutions to further
reinforce our market leading position.”
Mr. Beck Chen, Chief Financial Officer of Baozun
commented, “We are pleased to deliver another strong quarter of
growth with GMV increasing by 60.5% year-over-year. We also saw our
margins significantly improve along with non-GAAP net income which
more than doubled when compared to the same period last year. We
began migrating a portion of our media-related services business
towards a more asset-light model during this quarter, which is
expected to decrease risk and increase our working capital
efficiency.”
First Quarter 2017 Financial
Results
Total net revenues were
RMB804.9 million (US$116.9 million), an increase of 20.5% from
RMB668.2 million in the same quarter of last year.
Product sales revenue was
RMB498.0 million (US$72.3 million), an increase of 6.9% from
RMB465.7 million in the same quarter of last year.
Services revenue was RMB306.9
million (US$44.6 million), an increase of 51.6% from RMB202.5
million in the same quarter of last year. The increase was
primarily attributable to the rapid growth of the Company’s
consignment and service fee model businesses, and in particular,
growth in sales of apparel products sold by existing brand partners
as they expand their online presence.
Total operating expenses were
RMB789.5 million (US$114.7 million), compared with RMB664.2 million
in the same quarter of last year.
- Cost of products was RMB439.1
million (US$63.8 million), compared with RMB410.8 million in the
same quarter of last year. The increase was primarily due to an
increase in the volume of product sales from the Company’s core
brand e-commerce business.
- Fulfillment expenses were RMB132.4 million
(US$19.2 million), compared with RMB93.0 million in the same
quarter of last year. The increase was primarily due to increases
in GMV contribution from the Company’s consignment business,
percentage of total orders fulfilled by a premium delivery service
provider, and warehouse rental expenses.
- Sales and marketing expenses were RMB162.5
million (US$23.6 million), compared with RMB119.4 million in the
same quarter of last year. The increase was primarily due to
increases in store operation staff and promotional and marketing
expenses associated with Company-operated online stores.
- Technology and content expenses were RMB28.8
million (US$4.2 million), compared with RMB21.2 million in the same
quarter of last year. The increase was primarily due to increases
in technology-focused staff, share-based compensation expense and
project-based variable technological expenses from brand
stores.
- General and administrative expenses were
RMB27.2 million (US$4.0 million), compared with RMB20.3 million in
the same quarter of last year. The increase was primarily due to
increases in administrative staff cost and share-based compensation
expense.
Income from operations was
RMB15.3 million (US$2.2 million), compared with RMB4.0 million in
the same quarter of last year. Operating margin was 1.9 %, compared
with 0.6% in the same quarter of last year.
Non-GAAP income from
operations7 was RMB33.6 million (US$4.9 million),
compared with RMB14.0 million in the same quarter of last year.
Non-GAAP operating margin was 4.2%, compared with 2.1% in the same
quarter of last year.
Net income attributable to
Baozun ordinary shareholders was RMB10.6 million (US$1.5 million),
an increase of 157.4% from the same quarter of last year. Basic and
diluted net income attributable to Baozun ordinary shareholders per
ADS were RMB0.20 (US$0.03) and RMB0.18 (US$0.03), respectively,
compared with basic and diluted net income attributable to Baozun
ordinary shareholders per ADS of RMB0.09 in the same period of
2016.
Non-GAAP net income
attributable to Baozun ordinary shareholders was RMB28.9 million
(US$4.2 million), an increase of 104.0% from the same quarter last
year. Basic and diluted non-GAAP net income attributable to Baozun
ordinary shareholders per ADS[8] were RMB0.54 (US$0.08) and RMB0.50
(US$0.07), respectively, compared with basic and diluted non-GAAP
net income attributable to Baozun ordinary shareholders per ADS of
RMB0.29 and RMB0.27, respectively, in the same period of 2016.
As of March 31, 2017, the Company had RMB877.0
million (US$127.4 million) in cash, cash equivalents and
short-term investment, a decrease from RMB957.3 million as
of December 31, 2016 primarily due to investment in logistics
space.
Business Outlook
For the second quarter of 2017, the Company
expects total net revenues to be between RMB870 million and RMB890
million, representing year-over-year growth of approximately 24% to
27%.
Conference Call
The Company will host a conference call to
discuss the earnings at 9:00 p.m. Eastern Time on Tuesday, May 16,
2017 (9:00 a.m. Beijing time on Wednesday, May 17, 2017).
Dial-in numbers for the live conference call are
as follows:
|
|
|
International: |
|
+852 5808 3202 |
U.S. Toll Free |
|
+1 631-514-2526 |
Mainland China Toll
Free |
|
4001-200-539 |
Hong Kong Toll
Free |
|
800-905-927 |
Passcode: BZUN |
|
|
|
|
|
A telephone replay of the call will be available
after the conclusion of the conference call through 11:59 p.m. Hong
Kong Time, May 23, 2017.
Dial-in numbers for the replay are as
follows:
|
|
|
International
Dial-in |
|
+61-2-9641-7900 |
U.S. Toll Free
|
|
1-866-846-0868 |
Passcode: 8208293 |
|
|
|
|
|
A live and archived webcast of the conference
call will be available on the Investor Relations section of
Baozun’s website at http://ir.baozun.com/.
Use of Non-GAAP Financial
Measures
In evaluating the Company’s business, the
Company considers and uses non-GAAP net income/(loss) from
operations, non-GAAP operating margin, non-GAAP net income/(loss),
non-GAAP net margin, non-GAAP net income (loss) attributable to
Baozun ordinary shareholders and non-GAAP net income (loss)
attributable to Baozun ordinary shareholders per ADS, as
supplemental measures to review and assess the Company’s operating
performance. The presentation of these non-GAAP financial measures
is not intended to be considered in isolation or as a substitute
for the financial information prepared and presented in accordance
with U.S. GAAP. Non-GAAP net income/(loss) from operations is net
income/(loss) from operations excluding share-based compensation
expenses. Non-GAAP operating margin is non-GAAP income from
operations as a percentage of total net revenues. Non-GAAP net
income/(loss) is net income/(loss) excluding share-based
compensation expenses. Non-GAAP net margin is non-GAAP net income
as a percentage of total net revenues. Non-GAAP net income
(loss) attributable to Baozun ordinary shareholders is net income
(loss) attributable to Baozun ordinary shareholders excluding
share-based compensation expenses. Non-GAAP net income (loss)
attributable to Baozun ordinary shareholders per ADS is non-GAAP
net income (loss) attributable to Baozun ordinary shareholders
divided by weighted average number of shares used in calculating
net income per ordinary share multiplied by three.
The Company presents the non-GAAP financial
measures because they are used by the Company’s management to
evaluate the Company’s operating performance and formulate business
plans. Non-GAAP income/(loss) from operations and non-GAAP net
income/(loss) enable the Company’s management to assess the
Company’s operating results without considering the impact of
share-based compensation expenses. The Company also believes that
the use of the non-GAAP measures facilitate investors’ assessment
of the Company’s operating performance.
The non-GAAP financial measures are not defined
under U.S. GAAP and are not presented in accordance with U.S. GAAP.
The non-GAAP financial measures have limitations as analytical
tools. One of the key limitations of using non-GAAP income/(loss)
from operations and non-GAAP net income/(loss) is that they do not
reflect all items of income and expense that affect the Company’s
operations. Share-based compensation expenses have been and may
continue to be incurred in the Company’s business and is not
reflected in the presentation of non-GAAP income/(loss) from
operations and non-GAAP net income/(loss). Further, the non-GAAP
measures may differ from the non-GAAP measures used by other
companies, including peer companies, and therefore their
comparability may be limited. In light of the foregoing
limitations, the non-GAAP net income/(loss) from operations,
non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net
margin, non-GAAP net income (loss) attributable to Baozun ordinary
shareholders and non-GAAP net income (loss) attributable to Baozun
ordinary shareholders per ADS for the period should not be
considered in isolation from or as an alternative to net
income/(loss) from operations, operating margin, net income/(loss),
net margin, net income (loss) attributable to Baozun ordinary
shareholders and net income (loss) attributable to Baozun ordinary
shareholders per ADS, or other financial measures prepared in
accordance with U.S. GAAP.
The Company compensates for these limitations by
reconciling the non-GAAP financial measures to the nearest U.S.
GAAP performance measures, which should be considered when
evaluating the Company’s performance.
Safe Harbor Statements
This news release contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and as defined in the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "target," "going forward," "outlook" and
similar statements. Such statements are based upon management's
current expectations and current market and operating conditions,
and relate to events that involve known or unknown risks,
uncertainties and other factors, all of which are difficult to
predict and many of which are beyond the Company's control, which
may cause the Company's actual results, performance or achievements
to differ materially from those in the forward-looking statements.
Further information regarding these and other risks, uncertainties
or factors is included in the Company's filings with the U.S.
Securities and Exchange Commission. The Company does not undertake
any obligation to update any forward-looking statement as a result
of new information, future events or otherwise, except as required
under law.
About Baozun Inc.
Baozun is the leading brand e-commerce service
partner that helps brands execute their e-commerce strategies in
China by selling their goods directly to customers online or by
providing services to assist with their e-commerce operations. The
Company's integrated end-to-end brand e-commerce capabilities
encompass all aspects of the e-commerce value chain, covering IT
solutions, store operations, digital marketing, customer services,
warehousing and fulfillment.
For more information, please visit
http://ir.baozun.com
_______________________
1 This announcement contains translations of certain
Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate
solely for the convenience of the reader. Unless otherwise noted,
the translation of RMB into US$ has been made at RMB6.8832 to
US$1.00, the noon buying rate in effect on March 31, 2017 as set
forth in the H.10 Statistical Release of the Federal Reserve
Board.
2 Non-GAAP net income attributable to Baozun ordinary
shareholders is a non-GAAP financial measure, which is defined as
net income attributable to Baozun ordinary shareholders excluding
share-based compensation expenses.
3 Each ADS represents three Class A ordinary shares.
4 GMV includes value added tax and excludes (i) shipping
charges, (ii) surcharges and other taxes, (iii) value of the goods
that are returned and (iv) deposits for purchases that have not
been settled.
5 Distribution GMV refers to the GMV under the distribution
business model.
6 Non-distribution GMV refers to the GMV under the service
fee business model and the consignment business model.
7 Non-GAAP income from operations is a non-GAAP financial
measure, which is defined as income from operations excluding
share-based compensation expenses.
8 Basic and diluted non-GAAP net income attributable to
Baozun ordinary shareholders per ADS are non-GAAP financial
measures, which are defined as non-GAAP net income (loss)
attributable to Baozun ordinary shareholders divided by weighted
average number of shares used in calculating basic and diluted net
income per ordinary share multiplied by three, respectively.
|
|
Baozun
Inc. |
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS |
(In
thousands) |
|
|
|
|
|
|
|
|
|
As
of |
|
|
December 31,
2016 |
|
March
31,
2017 |
|
March
31,
2017 |
|
|
RMB |
|
RMB |
|
US$ |
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
917,319 |
|
625,863 |
|
90,926 |
Restricted cash |
|
50,832 |
|
15,390 |
|
2,236 |
Short-term investment |
|
40,000 |
|
251,150 |
|
36,487 |
Accounts receivable, net |
|
624,817 |
|
521,991 |
|
75,836 |
Inventories |
|
312,071 |
|
293,104 |
|
42,583 |
Advances to suppliers |
|
75,727 |
|
69,655 |
|
10,120 |
Prepayments and other current assets |
|
108,495 |
|
97,092 |
|
14,106 |
Amounts due from related parties |
|
38,772 |
|
49,039 |
|
7,124 |
Total current assets |
|
2,168,033 |
|
1,923,284 |
|
279,418 |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Investments in equity investees |
|
33,443 |
|
32,913 |
|
4,782 |
Property and equipment, net |
|
100,892 |
|
105,647 |
|
15,349 |
Intangible assets, net |
|
26,984 |
|
29,009 |
|
4,214 |
Other non-current assets |
|
26,581 |
|
93,744 |
|
13,619 |
Deferred tax assets |
|
12,332 |
|
12,456 |
|
1,810 |
Total
non-current assets |
|
200,232 |
|
273,769 |
|
39,774 |
|
|
|
|
|
|
|
Total assets |
|
2,368,265 |
|
2,197,053 |
|
319,192 |
Baozun Inc. |
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS |
(In thousands, except for share and per share
data) |
|
|
|
|
|
|
|
|
|
As of |
|
|
December 31,
2016 |
|
March
31,
2017 |
|
March
31,
2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
526,461 |
|
|
457,267 |
|
|
66,432 |
|
Notes payable |
|
115,140 |
|
|
- |
|
|
- |
|
Income tax payables |
|
15,811 |
|
|
23,109 |
|
|
3,357 |
|
Accrued expenses and other current liabilities |
|
138,841 |
|
|
119,445 |
|
|
17,354 |
|
Total current liabilities |
|
796,253 |
|
|
599,821 |
|
|
87,143 |
|
Total liabilities |
|
796,253 |
|
|
599,821 |
|
|
87,143 |
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
Class A ordinary shares (US$0.0001 par value;
470,000,000 shares authorized, 146,111,244 and 146,666,712 shares
issued and outstanding as of December 31, 2016 and March 31, 2017,
respectively) |
|
92 |
|
|
92 |
|
|
14 |
|
Class B ordinary shares (US$0.0001 par value;
30,000,000 shares authorized, 13,300,738 shares issued and
outstanding as of December 31, 2016 and March 31, 2017,
respectively) |
|
8 |
|
|
8 |
|
|
1 |
|
Additional paid-in capital |
|
1,761,430 |
|
|
1,781,538 |
|
|
258,824 |
|
Accumulated deficit |
|
(233,866 |
) |
|
(223,261 |
) |
|
(32,435 |
) |
Accumulated other comprehensive income |
|
44,348 |
|
|
38,855 |
|
|
5,645 |
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
1,572,012 |
|
|
1,597,232 |
|
|
232,049 |
|
|
|
|
|
|
|
Total
liabilities and shareholders'
equity |
2,368,265 |
|
|
2,197,053 |
|
|
319,192 |
|
Baozun Inc. |
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(In thousands, except for share and per share
data and per ADS data) |
|
|
|
|
|
|
|
|
|
For the three months ended
March 31, |
|
|
2016 |
|
2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
Net revenues |
|
|
|
|
|
|
Product sales |
|
465,669 |
|
|
497,950 |
|
|
72,343 |
|
Services |
|
202,519 |
|
|
306,921 |
|
|
44,590 |
|
Total net revenues |
|
668,188 |
|
|
804,871 |
|
|
116,933 |
|
|
|
|
|
|
|
|
Operating expenses
(1) |
|
|
|
|
|
|
Cost of products |
|
(410,805 |
) |
|
(439,085 |
) |
|
(63,791 |
) |
Fulfillment |
|
(92,969 |
) |
|
(132,437 |
) |
|
(19,241 |
) |
Sales and marketing |
|
(119,443 |
) |
|
(162,468 |
) |
|
(23,604 |
) |
Technology and content |
|
(21,160 |
) |
|
(28,763 |
) |
|
(4,179 |
) |
General and administrative |
|
(20,328 |
) |
|
(27,243 |
) |
|
(3,957 |
) |
Other operating income, net |
|
520 |
|
|
468 |
|
|
68 |
|
Total operating expenses |
|
(664,185 |
) |
|
(789,528 |
) |
|
(114,704 |
) |
Income from
operations |
|
4,003 |
|
|
15,343 |
|
|
2,229 |
|
Other income (expenses) |
|
|
|
|
|
|
Interest income |
|
2,803 |
|
|
3,132 |
|
|
455 |
|
Interest expense |
|
- |
|
|
(15 |
) |
|
(2 |
) |
Exchange gain (loss) |
|
79 |
|
|
(151 |
) |
|
(22 |
) |
Income before income tax |
|
6,885 |
|
|
18,309 |
|
|
2,660 |
|
Income tax expense |
|
(2,765 |
) |
|
(7,174 |
) |
|
(1,042 |
) |
Share of loss in equity method investment, net of tax
of nil |
|
- |
|
|
(530 |
) |
|
(77 |
) |
Net income attributable to
ordinary shareholders of Baozun Inc. |
|
4,120 |
|
|
10,605 |
|
|
1,541 |
|
|
|
|
|
|
|
|
Net income per share
attributable to ordinary shareholders of Baozun Inc.: |
|
|
|
|
|
|
Basic |
|
0.03 |
|
|
0.07 |
|
|
0.01 |
|
Diluted |
|
0.03 |
|
|
0.06 |
|
|
0.01 |
|
Net income per ADS
attributable to ordinary shareholders of Baozun Inc.: |
|
|
|
|
|
|
Basic |
|
0.09 |
|
|
0.20 |
|
|
0.03 |
|
Diluted |
|
0.09 |
|
|
0.18 |
|
|
0.03 |
|
Weighted average shares used in calculating net
income per ordinary share |
|
|
|
|
|
|
Basic |
|
148,876,209 |
|
|
159,516,894 |
|
|
159,516,894 |
|
Diluted |
|
159,274,427 |
|
|
174,776,404 |
|
|
174,776,404 |
|
|
|
|
|
|
|
|
Net income attributable to ordinary
shareholders of Baozun Inc. |
|
4,120 |
|
|
10,605 |
|
|
1,541 |
|
Other comprehensive income, net of tax of nil: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(1,547 |
) |
|
(5,493 |
) |
|
(798 |
) |
Comprehensive income |
|
2,573 |
|
|
5,112 |
|
|
743 |
|
|
(1) Share-based compensation expenses are allocated in operating
expenses items as follows:
|
|
For the three months ended
March 31, |
|
|
2016 |
|
2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
Fulfillment |
|
462 |
|
738 |
|
107 |
Sales and marketing |
|
4,340 |
|
5,246 |
|
762 |
Technology and content |
|
1,848 |
|
5,379 |
|
781 |
General and administrative |
|
3,377 |
|
6,886 |
|
1,000 |
|
|
10,027 |
|
18,249 |
|
2,650 |
Baozun Inc. |
Reconciliations of GAAP and Non-GAAP
Results |
(in thousands,
except for share and per ADS
data) |
|
|
|
|
|
|
|
For the three months ended
March 31, |
|
|
2016 |
|
2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
4,003 |
|
15,343 |
|
2,229 |
Add: Share-based compensation expenses |
|
10,027 |
|
18,249 |
|
2,650 |
Non-GAAP income from operations |
|
14,030 |
|
33,592 |
|
4,879 |
|
|
|
|
|
|
|
Net income
attributable to ordinary shareholders of Baozun Inc. |
|
4,120 |
|
10,605 |
|
1,541 |
Add: Share-based compensation expenses |
|
10,027 |
|
18,249 |
|
2,650 |
Non-GAAP net income attributable to ordinary shareholders
of Baozun Inc. |
|
14,147 |
|
28,854 |
|
4,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to ordinary shareholders of Baozun
Inc. per ADS: |
|
|
|
|
|
|
Basic |
|
0.29 |
|
0.54 |
|
0.08 |
Diluted |
|
0.27 |
|
0.50 |
|
0.07 |
Weighted average shares used in calculating net income per
ordinary share |
|
|
|
|
|
|
Basic |
|
148,876,209 |
|
159,516,894 |
|
159,516,894 |
Diluted |
|
159,274,427 |
|
174,776,404 |
|
174,776,404 |
For investor and media inquiries, please contact:
Baozun Inc.
Ms. Caroline Dong
ir@baozun.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com
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