Vipshop (NYSE:VIPS) reported modest revenue growth and stronger profitability for the first quarter of 2026, while management said a later Chinese New Year pulled forward demand into the holiday period and contributed to softer sales trends in March and into the second quarter.
On the company’s earnings call, Co-founder, Chairman and CEO Eric Shen said the quarter reflected a “significant calendar-driven shift” tied to the timing of the Chinese New Year. He said holiday demand was strong, particularly in apparel, but that the surge effectively pulled forward some demand and left March weaker.
Revenue Rises 1.2% as Margins Improve
CFO Mark Wang said Vipshop’s first-quarter results came in within the company’s guided range. Total net revenues increased 1.2% year over year to RMB 26.6 billion, compared with RMB 26.3 billion in the prior-year period.
Gross profit rose 6.8% to RMB 6.5 billion, while gross margin improved to 24.4% from 23.2% a year earlier. Wang attributed the margin performance to a favorable category mix and continued operational discipline.
Income from operations increased 9.7% to RMB 2.5 billion, and operating margin rose to 9.4% from 8.7%. Non-GAAP income from operations increased 3.5% to RMB 2.7 billion, with non-GAAP operating margin improving slightly to 10.2% from 10.0%.
Net income attributable to Vipshop shareholders rose 13.6% year over year to RMB 2.2 billion, and diluted earnings per ADS increased to RMB 4.48 from RMB 3.72. Non-GAAP net income attributable to shareholders was RMB 2.31 billion, flat with the prior-year period, while non-GAAP diluted earnings per ADS increased to RMB 4.68 from RMB 4.43.
Vipshop ended the quarter with RMB 28.3 billion in cash, cash equivalents and restricted cash, along with RMB 2.7 billion in short-term investments.
Second-Quarter Outlook Reflects Softer Consumer Activity
Vipshop guided for second-quarter net revenues of RMB 24.5 billion to RMB 25.8 billion, representing a year-over-year change of approximately negative 5% to 0%.
During the question-and-answer session, Shen said January and February were very strong because consumer purchasing activity was concentrated around the holiday period. However, he said the company saw a decline in March, and April was also weak. May remained negative to date, though Shen said it had improved somewhat from April.
Jessie Zheng, Vipshop’s Head of Investor Relations, said the company had “relatively low visibility on consumer sentiment and activity” after the first half of the quarter. She said management had “not very big expectations” for the month-long industry promotion period associated with 618, a major midyear shopping event in China.
Shen said Vipshop expects the 618 period to be relatively stable, not especially strong or weak, and that the company took a conservative approach to its second-quarter forecast. For the second half, management said it sees potential opportunities if consumer sentiment improves marginally, particularly in discretionary spending and apparel.
Management Highlights Merchandising, SVIP and AI Initiatives
Shen said Vipshop is continuing to focus on “quality of growth” through merchandising optimization, customer engagement and artificial intelligence integration. He said the company has benefited from a faster merchandising approach after realigning its teams last year, allowing it to move from market insights to products on the platform more quickly.
The company is also pushing its “Made-for-Vipshop” line into a new growth phase, with higher standards for quality, style and value, Shen said. Vipshop is coordinating more closely with brand partners’ seasonal calendars and fashion trends, while seeking to lock in exclusive low-priced inventory.
Shen said the company’s merchandising strategy supports the SVIP program by offering members access to private sales and differentiated inventory. He cited a recent event with a global athletic brand that drove a surge in new SVIP sign-ups, particularly among young male shoppers, and sales value “many times above the baseline.”
On AI, Shen said Vipshop initially focused on customer-facing applications such as virtual try-ons, improved search and recommendations, automated customer support and AI-generated content. The company is now using generative AI to scale personalized marketing, including video, photo and text content, which Shen said has improved customer acquisition efficiency. He also said AI is being used to support brand partners with business analytics, customer cohort insights and merchandising strategy.
Shan Shan Outlets and Commercial REIT Update
Wang said Vipshop’s Shan Shan Outlets business performed strongly in the first quarter, with gross merchandise value growing around 30% year over year.
Responding to an analyst question about offline trends, Zheng said China’s reported 3.6% apparel retail sales growth included both online and offline channels. Based on Vipshop’s observations, she said online apparel sales showed a notable decline, while offline growth was strong. She said higher online return rates may be compressing sales and revenue data, while consumers and brand partners have shifted some spending and resources toward offline outlet channels.
Zheng also said offline outlets benefited from a heavier concentration in sportswear and outdoor products, categories that continued to outperform online even as broader apparel categories such as womenswear and menswear weakened.
Wang also addressed Vipshop’s commercial REIT, which he said received approval from the China Securities Regulatory Commission and the Shanghai Stock Exchange in late April and completed pricing on May 19. The REIT includes two underlying assets: Shan Shan Outlets in Zhengzhou and Harbin. Wang said Vipshop subscribed for 49% of the total shares in the REIT and will deconsolidate the assets from its financial statements.
On a GAAP basis, Wang said Vipshop expects to record a one-time investment gain of about RMB 5.3 billion in the second quarter, along with an increase of RMB 1.7 billion in income tax expenses. He also said the transaction would result in a significant increase in net cash inflow of RMB 1.7 billion in the second quarter.
Shareholder Return Plan Remains on Track
Wang said Vipshop remains on track with its 2026 commitment to return no less than 75% of full-year 2025 non-GAAP net income to shareholders. The company completed its annual dividend in April, distributing approximately $300 million.
For the quarters ahead, Wang said Vipshop expects to execute the remaining balance of its shareholder return program and has the financial capacity to meet its full-year allocation targets.
About Vipshop (NYSE:VIPS)
Vipshop Holdings Limited (NYSE:VIPS) is a leading online discount retailer in China, offering high-quality branded products at competitive prices through a time-limited, flash-sales model. The company provides consumers with access to a rotating selection of merchandise, combining the excitement of limited-time offers with curated brand partnerships to drive customer engagement and loyalty.
Vipshop’s platform features a diverse range of product categories, including apparel, footwear, cosmetics, home furnishings, digital electronics and other lifestyle goods.
