Chinese e-commerce giant JD.com reported first-quarter results early Tuesday that easily topped estimates for earnings and sales. U.S.-listed JD stock gained following the report.
JD reported adjusted earnings of 8.41 yuan per share on sales of 301.1 billion yuan, or $41.8 billion, for the March-ended quarter. Analysts polled by FactSet projected the Beijing-based company would post adjusted earnings of 7.03 yuan per share on sales of 290 billion yuan, or $40.3 billion.
Adjusted earnings increased 49% in local currency on a per-share basis. Sales increased 15.8%, a pickup up from 13.4% year-over-year revenue growth in Q4, 5.1% in Q3.
JD.com is China's largest e-commerce retailer by overall revenue. Its sales growth has accelerated, helped by a rebound in Chinese consumer spending. The Chinese government expanded a subsidy program earlier this year that encourages trade-ins for old electronics and other goods. JD also appears to be finding its footing against increased competition for the China e-commerce market from Alibaba Group, PDD Holdings, TikTok parent company ByteDance and others.
Retail revenue for JD increased 16.3% year-over-year to 263.8 billion yuan while logistics related revenue grew 11% to 46.9 billion yuan.
"We saw a strong start to the year, with solid results on both the top and bottom lines in Q1," said Sandy Xu, Chief Executive Officer of JD.com. "Our performance was supported by improving consumer sentiment and continued enhancements to JD's supply chain capabilities and user experience. User growth was particularly strong during the quarter, reflecting the increasing trust and mindshare JD has earned from consumers and further strengthening our ecosystem."
JD Stock Up 7% This Year
On the stock market today, U.S.-listed JD stock added 3.3% to close at 37.25. JD stock is up 7% so far this year, a performance helped significantly by a 6.5% jump in Monday trading. That was after the U.S. and China announced an easing for import tariffs.
Shares retook their 200-day moving average on Monday. JD is now eyeing its 50-day line.
Shares of JD got out a hot start to the year but have slumped since early March. JD's push into food delivery has some investors concerned about a hit to the company's overall profitability.
Xu said on a call with analysts that the company sees food delivery as a "vast market" with significant room for growth.
"We do not see food delivery as a standalone business," Xu said, according to a FactSet transcript. "It's deeply rooted and well integrated into JD's robust retail infrastructure and ecosystem, a pivotal differentiator."
Alibaba Earnings On Deck
JD stock has been outperformed by its e-commerce rival Alibaba Group, which has rallied 56% this year amid optimism about its AI offerings. Alibaba will report its March quarter earnings on Thursday morning.
JD stock has an IBD Composite Rating of 86 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one.
