Secoo Shares Drop 6% on Disappointing Earnings
The stock of Secoo Holding Ltd. (Nasdaq: SECO) fell 6 percent today to $9.02 per share after the company announced that its income in the first quarter rose a disappointing 10 percent from a year ago to $4.1 million.
The Beijing-based company, which operates one of the largest upscale products and services platforms in China, said its revenue rose 43 percent during the first three months to $127.9 million compared with $89.6 million a year ago. The cost of revenues increased 44 percent to $106.9 million.
Earnings per fully diluted American depositary share were 8 cents in contrast to a loss of $2.69 per ADS a year ago.
Secoo's customers grew nearly 56 percent to 160,900, while the number of orders increased 45 percent to 306,100 in the first quarter, the company reported.
Operating expenses increased 49 percent to $17.3 million, with fulfillment costs soaring 73 percent, attributable to surging delivery and packaging expenses.
Secoo said in the first three months this year it has deepened its collaboration with 83 brands, attracting more than 300 designers to its fashion platform. It also began selling organic fruit through a partnership with "Chu Orange," as well as design upscale tourism products for its online platform. In addition, Secoo expanded into Sri Lanka with a line of merchandise called "Love in Sri Lanka."
The chairman and chief executive officer of Secoo, Richard Rixue Li, said he was pleased with the progress of the company's brand network expansion, as well as its enlarged portfolio of products and services.
"Our strong growth momentum reaffirms the robust market environment that we are operating in, the viability and scalability of our business model, as well as our market-leading position in the Chinese online luxury products and services industry," Li said in a statement today.
For the second quarter, Secoo said it is expecting revenue growth of between 40 percent and 44 percent from the same period last year.
The chief financial officer of Secoo, Shaojun Chen, said, "Going forward, we will continue to strengthen our brand relationship, enhance our technical driving ability and expand our online and offline presence with improved operating efficiency."
The stock of Secoo lost 6 percent in trading Tuesday to $9.02 per share after the company posted first quarter earnings.
(Source: Thomson Reuters Eikon)