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Secoo, Upscale Shopping Site, Sends Stock 6% Down With Lower Income

Belinda Zhou 2019-08-30 07:00 AM

Shares in Secoo Holding Ltd. (Nasdaq: SECO) fell 6 percent to $7.66 apiece Thursday, though the company reported strong revenue growth for the second quarter.

The Beijing-based high-end products and services platform said its revenue rose 40 percent during the three months through June to $249.4 million year-over-year. Its net income declined to $5.8 million, or 11 cents per American depositary share, representing a 10 percent decrease year-over-year.

Secoo said its marketing expenses skyrocketed during the second quarter to $22.1 million, a year-over-year increase of 70 percent, offsetting revenue growth.

The company announced its gross market value, GMV, of all orders of products and services jumped 96 percent to $471.8 million from a year ago. The total number of quarterly orders has more than doubled from a year ago, totaling 955,000, it reported.

“We are well positioned to evolve with market preference by strengthening and extending our trusted supply chain system and brand partnerships across the globe to capture this tremendous opportunity in the luxury lifestyle industry,” Rixue Li, the chief executive officer of Secoo, said in a statement today.

Secoo saw the number of its partnering brands soar in the second quarter, adding new 190 merchants. By far, the company said it covers more than 3,800 global and domestic brands. The company announced the cooperation with footwear brand UGG, luxury fashion brand Balmain and others.

“Our solid second quarter results underscore the successful execution of our core business strategy in building China’s leading premium lifestyle platform by leveraging both our online and offline capabilities with broadened brand relationships and enhanced customer experience,” Shaojun Shen, the chief financial officer of Secoo, commented in the statement.

Looking ahead, the company said it expects to generate 1.9 billion to 2 billion yuan ($280 million) for total revenue in the third quarter, at a 21 percent to 27 percent increase from a year ago.