Why Vipshop Holdings (VIPS) Is Soaring After the Bell

NEW YORK (TheStreet) -- Vipshop Holdings (VIPS) is soaring in extended trading after a blowout fourth quarter and above-consensus current-quarter guidance.

After the bell, shares had added 21% to $154.60.

The China-based discount retailer recorded net income of 49 cents in the three months to December. Analysts surveyed by Thomson Reuters had anticipated net income of 41 cents a share.

Quarterly revenue of $651 million saw an explosive 117.3% year-over-year increase, primarily resulting from a 119.5% increase in the number of active customers to 5.7 million from 2.6 million. Analysts had forecast total sales of $559.43 million.

"We are very proud and excited to have exited 2013 with four quarters of consecutive profitability and strong momentum heading into 2014. This success was driven by our solid financial growth which remained in triple-digit percentages for both the top line and bottom line throughout the year," said CEO Erin Shen in a statement.

For the first quarter ending March, the company expects net revenue of $640 million to $650 million, a year-over-year growth rate of 106% to 109%. Analysts had expected a growth rate of 78% to total sales of $554.46 million.

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TheStreet Ratings team rates VIPSHOP HOLDINGS LTD -ADR as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate VIPSHOP HOLDINGS LTD -ADR (VIPS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

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