Online retailer JD.com (JD) - Get Report on Friday posted a surge in first-quarter sales as the coronavirus pandemic kept Chinese consumers indoors, but earnings that came in well below year-earlier levels.
JD.com said sales for the first quarter were $120.6 billion, an increase of 20.7% from the first quarter of 2019. However, net income shrank on a quarter-by-quarter basis, falling to $151.5 million, or 10 cents an American depositary receipt, vs. $1.02 billion, or 70 cents per ADR, in the first quarter of 2019.
Through the coronavirus outbreak that led to one of the most stringent lockdowns in the world, JD.com saw a surge in Chinese demand for its products and services as inactive and infrequent customers returned to the platform, the company said.
Annual active customer accounts jumped by nearly 25% to 387.4 million in the 12 months ended March 31 from 310.5 million in the year-ago period. Mobile daily active users increased by 46% year over year.
At the same time, costs to continue bolstering its fulfillment centers offset sales for the Alibaba (BABA) - Get Report competitor. Fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and payment processing expenses, increased by 29% for the first quarter, the company said.
“Strong user growth during the first quarter reflects consumers’ increasing reliance on JD.com to support every aspect of their lives, and confidence in our commitment to providing a broad selection of quality products and best-in-class services,” CEO Richard Liu said in a statement.
JD.com's ADRs listed on the Nasdaq were up 0.92% at $49.41 in trading on Friday. Mizuho analysts earlier this week raised their price target for the stock to $58 from $37 because of “significant opportunities in online pharmacy” and other essential goods during the coronavirus pandemic.