Baozun Announces First Quarter 2024 Unaudited Financial Results

Rhea-AI Summary

Baozun (Nasdaq: BZUN, HKEX: 9991) reported its Q1 2024 unaudited financial results. The company saw a 5% year-over-year revenue growth to RMB1.98 billion. Despite this, Baozun incurred a net loss attributable to shareholders of RMB66.6 million, an improvement from the RMB83.5 million loss in Q1 2023. E-Commerce segment turned positive in operating cash flow for the first time since 2019. However, operational losses increased to RMB54.8 million from RMB40.6 million a year ago. Brand Management's product sales surged 65.6% to RMB312.9 million. Baozun continues its strategic transformation, focusing on growth and financial stability.

Positive

• Total net revenues increased by 4.9% to RMB1,979.8 million from RMB1,887.8 million.
• E-Commerce segment achieved positive operating cash flow for the first time since 2019.
• Brand Management's product sales increased by 65.6% to RMB312.9 million.
• Double-digit growth in digital marketing and IT solutions services revenue.
• Net loss attributable to shareholders improved to RMB66.6 million from RMB83.5 million in Q1 2023.

Negative

• Loss from operations increased to RMB54.8 million from RMB40.6 million in the same quarter of last year.
• Non-GAAP operating loss rose to RMB17.5 million from RMB9.7 million.
• Operating margin was negative 2.8%, down from negative 2.2% in the same period of 2023.
• Adjusted operating profit of E-Commerce fell to RMB11.8 million from RMB25.2 million.
• Adjusted operating loss of Brand Management was RMB29.3 million, a slight improvement but still substantial.
• Cash and cash equivalents decreased to RMB2,946.7 million from RMB3,072.8 million as of December 31, 2023.

Insights

Financial Analyst

The latest financial results for Baozun Inc. show a mixed performance. On the positive side, the company reported a 5% year-over-year revenue growth, driven by increased contributions from Brand Management and better momentum in E-Commerce. This growth is a positive indicator of the company’s ongoing efforts to diversify its revenue streams and enhance its strategic transformation.

However, the financials also reveal some areas of concern. Despite the revenue growth, Baozun reported a net loss of RMB66.6 million (US$9.2 million), narrowed from the previous year's RMB83.5 million but still significant. The company's operating margin remains negative at -2.8%. This indicates that while revenue increased, profitability is still a challenge. The losses in Brand Management and reduced adjusted operating profits in E-Commerce are ongoing issues that need addressing.

Additionally, the company’s cash and cash equivalents have slightly decreased by approximately RMB126.1 million from December 2023 to March 2024. Although the focus on improving operating cash flows is evident, this decrease highlights the importance of maintaining liquidity, especially in a competitive market like digital commerce.

For retail investors, the main takeaway is that Baozun is making progress, but the company still faces significant challenges in achieving consistent profitability. Monitoring the company's ability to reduce its losses and improve operating margins will be important in the coming quarters.

Market Research Analyst

From a market perspective, Baozun's performance highlights its strategic alignment with current e-commerce trends. The company’s success in increasing service revenue and expanding its digital marketing and IT solutions, which showed a 22% year-over-year growth, indicates strong adaptability to market demands. The emphasis on omni-channel expansion, with 42.8% of brand partners engaging in multi-channel store operations, aligns with prevailing trends in retail where consumers seek seamless experiences across various touchpoints.

However, the notable decrease in product sales revenue of E-Commerce by 17.3% suggests competitive pressures or shifts in consumer preferences that may have impacted sales. The robust performance in digital marketing and IT services partially offsets this decline, yet it implies that Baozun must continually innovate to stay ahead in a rapidly evolving market.

Investors should watch how Baozun leverages its technology portfolio to deepen relationships with brands and how it addresses the decline in certain product sales categories. The company's strategic initiatives appear promising, but execution and market reception will ultimately determine their success.

Tech Expert

Analyzing Baozun's technological focus reveals a commitment to enhancing its service offerings and operational efficiencies. The double-digit growth in digital marketing and IT solutions reflects the company's investment in advanced technologies to support its clients. This growth is critical as it positions Baozun as a digital enabler in the e-commerce space, offering tailored solutions that drive client success in highly competitive markets.

Moreover, the positive shift in operating cash flow for the E-Commerce segment, turning positive for the first time since 2019, underscores the effectiveness of Baozun’s tech-driven operational improvements. This is a significant milestone, indicating that the company's efforts in optimizing its logistics, supply chain and IT infrastructure are starting to yield financial benefits.

For retail investors, Baozun's tech-driven approach could be a key differentiator in the e-commerce landscape. Continued investments in technology not only support current operations but also pave the way for future innovations that could enhance the company's market position and profitability.

SHANGHAI, May 28, 2024 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced its unaudited financial results for the first quarter ended March 31, 2024.

Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, commented, "I'm pleased with our solid execution of transformation in the first quarter of 2024. E-Commerce has made progress in growing service revenue and introducing high-quality exclusive distribution models. Brand Management continues to advance in transforming Gap China, launching several China-for-China products and merchandising programs, which have shown positive market acceptance. With these encouraging results, we are confident and committed to our strategic transformation to drive growth."

Ms. Catherine Zhu, Chief Financial Officer of Baozun, commented, "I'm delighted to report that Baozun achieved a 5% year-over-year revenue growth, driven by Brand Management's increased contributions and better topline momentum from E-Commerce. We also enriched operating cash flows and free cash flow, achieving a solid year-over-year improvement. Additionally, the operating cash flow for our E-Commerce segment in the first quarter turned positive for the first time since 2019. As we navigate through 2024, our focus remains on driving strategic growth, ensuring financial stability, and creating sustainable value for our shareholders."

First Quarter 2024 Financial Highlights

• Total net revenues were RMB1,979.8 million (US$^[1]274.2 million), representing an increase of 4.9% compared with RMB1,887.8 million for the same period of 2023.
• Loss from operations was RMB54.8 million (US$7.6 million), compared with RMB40.6 million in the same quarter of last year. Operating margin was negative 2.8%, compared with negative 2.2% for the same period of 2023.
• Non-GAAP loss from operations^[2] was RMB17.5 million (US$2.4 million), compared with RMB9.7 million in the same quarter of last year, with the increase loss mainly due to loss from Brand Management. Non-GAAP operating margin was negative 0.9%, compared with negative 0.5% for the same period of 2023.
  - Adjusted operating profit of E-Commerce^[3] was RMB11.8 million (US$1.6 million), compared with RMB25.2 million for the same period of 2023.
  - Adjusted operating loss of Brand Management^[3] was RMB29.3 million (US$4.0 million), compared with RMB34.9 million for the same period of 2023.
• Net loss attributable to ordinary shareholders of Baozun Inc. was RMB66.6 million (US$9.2 million), narrowed from RMB83.5 million for the same period of 2023.
• Non-GAAP net loss attributable to ordinary shareholders of Baozun Inc.^[4] was RMB15.4 million (US$2.1 million), compared with RMB13.1 million for the same period of 2023.
• Basic and diluted net loss attributable to ordinary shareholders of Baozun Inc. per American Depositary Share ("ADS^[5]") were both RMB1.10 (US$0.15), improved from both RMB1.42 for the same period of 2023.
• Basic and diluted non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. per ADS^[6] were both RMB0.25 (US$0.03), respectively, compared with both RMB0.22 for the same period of 2023.
• Cash and cash equivalents, restricted cash, and short-term investments totaled RMB2,946.7 million (US$408.1 million), as of March 31, 2024, compared with RMB 3,072.8 million as of December 31, 2023.

 

[1] This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.2203 to US$1.00, the noon buying rate in effect on March 29, 2024 as set forth in the H.10 Statistical Release of the Federal Reserve Board.

[2] Non-GAAP income (loss) from operations is a non-GAAP financial measure, which is defined as income (loss) from operations excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill, loss on variance from expected contingent acquisition payment, and cancellation fees of repurchased ADSs and returned ADSs.

[3] Following the acquisition of Gap Shanghai, the Group updated its operating segment structure resulting in two segments, which were (i) E-Commerce; (ii) Brand Management, for more information, please refer to Supplemental Information.

[4] Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. is a non-GAAP financial measure, which is defined as net income (loss) attributable to ordinary shareholders of Baozun Inc. excluding  the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill and investments, loss on variance from expected contingent acquisition payment, cancellation fees of repurchased ADSs and returned ADSs, fair value loss on derivative liabilities, loss on disposal of subsidiaries and investment in equity investee, and unrealized investment loss.

[5] Each ADS represents three Class A ordinary shares.

[6] Basic and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS are non-GAAP financial measures, which are respectively defined as non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. divided by weighted average number of shares used in calculating basic and diluted net income (loss) per ordinary share multiplied by three, respectively.

 

Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.

Adjusted operating profits/losses by segment are included in the Segments data of Segment Information.

Business Highlights

Baozun e-Commerce, or "BEC"

Baozun e-Commerce includes our China e-commerce businesses, such as brands' store operations, customer services and value-added services in logistics and supply chain management, IT and digital marketing. During the quarter, total service revenue returned to growth, with double digit growth in sportswear store operation revenues and strong performance in digital marketing and IT services.

Omni-channel expansion remains a key theme for our brand partners. By the end of the first quarter, approximately 42.8% of our brand partners engaged with us for store operations of at least two channels.

Baozun Brand Management, or "BBM"

BBM engages in holistic brand management, including strategy and tactic positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics, and technology empowerment. We aim to leverage our portfolio of technologies to forge longer and deeper relationships with brands.

Currently, we have Gap brand and Hunter brand under our Brand Management business line. During the quarter, product sales revenue for Brand Management totaled RMB312.9 million, a year-over-year increase of 65.6% from RMB189.0 million in the same quarter of last year. The year-over-year comparison also included a timing impact, as the Company started consolidation of Gap Shanghai in February 2023. Gross profit margin of product sales for Brand Management in the first quarter of 2024 was 53.1%.

First Quarter 2024 Financial Results

Total net revenues were RMB1,979.8 million (US$274.2 million), an increase of 4.9% from RMB1,887.8 million in the same quarter of last year. The increase in total net revenues was mainly driven by a 65.6% increase in product sales revenue of Brand Management.

Total product sales revenue was RMB707.5 million (US$98.0 million), compared with RMB666.1 million in the same quarter of last year, of which,

• Product sales revenue of E-Commerce was RMB394.6 million (US$54.7 million), a decrease of 17.3% from RMB477.1 million in the same quarter of last year. The decrease was primarily attributable to the Company's optimization of its product portfolio in distribution model, especially in the fast-moving consumer goods sector.

The following table sets forth a breakdown of product sales revenues of E-Commerce by key categories^[7] for the periods indicated:

 

		For the three months ended March 31,
		2023				2024
		RMB		% of Net Revenues		RMB			US$				% of Net Revenues		YoY Change
	(In millions, except for percentage)
Product Sales of E-Commerce
Appliances		225.3		11 %		190.7				26.4			10 %		-15 %
Beauty and cosmetics		66.5		4 %		69.0				9.6			3 %		4 %
Fast moving consumer goods		66.6		4 %		32.6				4.5			2 %		-51 %
Others		118.7		6 %		102.3				14.2			5 %		-14 %
Total net revenues from product sales of E-Commerce		477.1		25 %		394.6				54.7			20 %		-17 %

 

[7] Key categories refer to the categories that accounted for no less than 10% of product sales of E-Commerce revenues during the periods indicated.

 

• Product sales revenue of Brand Management was RMB312.9 million (US$43.3 million), an increase of 65.6% from RMB189.0 million in the same quarter of last year. The increase was primarily attributable to a full three-month operational period in this quarter compared to two-month operational period in the same quarter of last year.

Services revenue was RMB1,272.2 million (US$176.2 million), an increase of 4.1% from RMB1,221.7 million in the same quarter of last year. The increase was primarily due to the double-digit growth in digital marketing and IT solutions.

The following table sets forth a breakdown of services revenues by service type for the periods indicated:

 

		For the three months ended March 31,
		2023				2024
		RMB		% of Net Revenues		RMB		US$		% of Net Revenues			YoY Change
	(In millions, except for percentage)
Services revenue
Online store operations		364.1		19 %		366.6		50.7		19 %			1 %
Warehousing and fulfillment		487.3		26 %		461.9		64.0		23 %			-5 %
Digital marketing and IT solutions		377.4		20 %		462.2		64.1		23 %			22 %
Inter-segment eliminations[8]		(7.1)		0 %		(18.5)		(2.6)		-1 %			161 %
Total net revenues from services		1,221.7		65 %		1,272.2		176.2		64 %			4 %

 

Breakdown of total net revenues of online store operations of services by key categories^[9] of services for the periods indicated:

 

		For the three months ended March 31,
		2023				2024
		RMB		% of Net Revenues		RMB			US$					% of Net Revenues			YoY Change
	(In millions, except for percentage)
Online store operations in Services revenue
Apparel and accessories		255.6		14 %		277.2			38.4					14 %			8 %
-          Luxury		99.0		5 %		96.4			13.4					5 %			-3 %
-          Sportswear		88.9		5 %		111.7			15.4					6 %			26 %
-          Other apparel		67.7		4 %		69.1			9.6					3 %			2 %
Others		108.5		6 %		89.4			12.3					4 %			-18 %
Inter-segment eliminations[10]		(5.4)		-1 %		(8.1)			(1.1)					0 %			50 %
Total net revenues from online store operations in services		358.7		19 %		358.5			49.6					18 %			0 %

 

[8] The inter-segment eliminations mainly consist of revenues from digital marketing and IT services provided by E-Commerce to Gap, a brand under Brand Management.

[9] Key categories refer to the categories that accounted for no less than 10% of services revenue of E-Commerce during the periods indicated.

[10] The inter-segment eliminations mainly consist of revenues from store operation services provided by E-Commerce to Gap, a brand under Brand Management.

 

Total operating cost and expenses were RMB2,034.6 million (US$281.8 million), compared with RMB1,928.4 million in the same quarter of last year.

• Cost of products was RMB487.1 million (US$67.5 million), compared with RMB505.1 million in the same quarter of last year. The decrease was primarily due to the decline in product sales volume of E commerce, partially offset by the cost of product increase related to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023.
• Fulfillment expenses were RMB546.4 million (US$75.7 million), compared with RMB567.6 million in the same quarter of last year. The decrease was primarily due to a decline in E-commerce warehouse and logistics revenue, together with savings in Gap logistics expenses post-acquisition.
• Sales and marketing expenses were RMB694.0 million (US$96.1 million), compared with RMB592.7 million in the same quarter of last year. The increase was mainly due to more active performance-driven digital marketing activities during the quarter.
• Technology and content expenses were RMB133.2 million (US$18.4 million), compared with RMB114.9 million in the same quarter of last year. The increase was mainly due to more revenues from IT solutions during the quarter, partially offset by the Company's cost control initiatives and efficiency improvements.
• General and administrative expenses were RMB179.1 million (US$24.8 million), compared with RMB163.2 million in the same quarter of last year. The increase was primarily due to the increase in staff cost, as well as strategic investments in initiatives in high-quality digitalized distribution, Creative Content to Commerce business and brand management.

Loss from operations was RMB54.8 million (US$7.6 million), compared with RMB40.6 million in the same quarter of last year. Operating margin was negative 2.8%, compared with negative 2.2% in the same quarter of last year.

Non-GAAP loss from operations was RMB17.5 million (US$2.4 million), compared with RMB9.7 million in the same quarter of last year. The loss was mainly due to the loss generated from Brand Management business. Non-GAAP operating margin was negative 0.9%, compared with negative 0.5% in the same quarter of last year.

Adjusted operating profit of E-Commerce was RMB11.8 million (US$1.6 million), compared with RMB25.2 million in the same quarter of last year. Adjusted operating loss of Brand Management was RMB29.3 million (US$4.0 million), compared with RMB34.9 million in the same quarter of last year.

Unrealized investment loss was RMB17.0 million (US$2.4 million), compared with RMB42.6 million unrealized investment loss in the same quarter of last year. The unrealized investment loss of this quarter was mainly related to the decrease in the trading price of Lanvin Group, a company successfully listed on the New York stock exchange in December 2022 that the Company invested in June 2021.

Net loss attributable to ordinary shareholders of Baozun Inc. was RMB66.6 million (US$9.2 million), compared with RMB83.5 million in the same quarter of last year.

Basic and diluted net loss attributable to ordinary shareholders of Baozun Inc. per ADS were both RMB1.10 (US$0.15), compared with both RMB1.42 for the same period of 2023.

Non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. was RMB15.4 million (US$2.1 million), compared with RMB13.1 million in the same quarter of last year.

Basic and diluted non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. per ADS were both RMB0.25 (US$0.03), compared with RMB0.22 for the same period of 2023.

Segment Information

(a) Description of segments

Following the acquisition of Gap Shanghai, the Group updated its operating segments structure resulting in two segments, which were (i) E-Commerce and (ii) Brand Management;

The following summary describes the operations in each of the Group's operating segment:

(i) E-Commerce focuses on Baozun traditional e-commerce service business and comprises two business lines, BEC (Baozun E-Commerce) and BZI (Baozun International).

a>  BEC includes our mainland China e-commerce businesses, such as brands' store operations, customer services and value-added services in logistics and supply chain management, IT and digital marketing.

b>   BZI includes our e-commerce businesses outside of mainland China, including locations such as Hong Kong, Macau, Taiwan, South East Asia and Europe.

(ii) Brand Management engages in holistic brand management, encompassing strategy and tactic positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics and technology empowerment to leverage our portfolio of technologies to forge into longer and deeper relationships with brands. Currently, the Company runs brand management operations for the Gap and Hunter brands in Greater China.

(b) Segments data

The table below provides a summary of the Group's reportable segment results for the three months ended March 31, 2023 and 2024, with prior periods' segment information retrospectively recast to conform to current period presentation:

 

		For the three months ended March 31,
		2023		2024
		RMB		RMB
Net revenues:
E-Commerce		1,705,797		1,684,276
Brand Management		189,124		313,988
Inter-segment eliminations *		(7,125)		(18,494)
Total consolidated net revenues		1,887,796		1,979,770
Adjusted Operating Profits (Losses) **:
E-Commerce		25,272		11,758
Brand Management		(34,947)		(29,303)
Total Adjusted Operating Losses		(9,675)		(17,545)
Inter-segment eliminations *		-		-
Unallocated expenses:
Share-based compensation expenses		(20,103)		(29,324)
Amortization of intangible assets resulting from business acquisition		(8,142)		(7,911)
Acquisition-related expenses		(2,709)		-
Total other expenses		(37,016)		(8,236)
Loss before income tax and share of income in equity method investment		(77,645)		(63,016)
*The inter-segment eliminations mainly consist of revenues from services provided by E-Commerce to Brand Management.
**Adjusted Operating Profits (Losses) represent segment profits (losses), which is income (loss) from operations from each segment without allocating share-based compensation expenses, acquisition-related expenses and amortization of intangible assets resulting from business acquisition.

 

Update in Share Repurchase Programs
On January 24, 2024, the Company's board of directors authorized the management to set up and implement a new share repurchase program under which the Company may repurchase up to US$20 million worth of its outstanding (i) American depositary shares ("ADSs"), each representing three Class A ordinary shares, and/or (ii) Class A ordinary shares over the next 12 months starting from January 24, 2024. In April, the Company repurchased approximately 845 thousand of ADSs for approximately US$2.1 million under its share repurchase program through open market.

Conference Call
The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Tuesday, May 28, 2024 (7:30 p.m. Beijing time on the same day).

Dial-in details for the earnings conference call are as follows:

United States:	1-888-317-6003
Hong Kong:	800-963-976
Singapore:	800-120-5863
Mainland China:	4001-206-115
International:	1-412-317-6061
Passcode:	3291050

A replay of the conference call may be accessible through June 4, 2024 by dialing the following numbers:

United States:	1-877-344-7529
International:	1-412-317-0088
Canada:	855-669-9658
Replay Access Code:	2965819

A live webcast of the conference call will be available on the Investor Relations section of Baozun's website at http://ir.baozun.com. An archived webcast will be available through the same link following the call.

Use of Non-GAAP Financial Measures

The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP income (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.

The Company defines non-GAAP income (loss) from operations as income (loss) from operations excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill, loss on variance from expected contingent acquisition payment, and cancellation fees of repurchased ADSs and returned ADSs. The Company defines non-GAAP operating margin as non-GAAP income (loss) from operations as a percentage of total net revenues. The Company defines non-GAAP net income (loss) as net income (loss) excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill and investments, loss on variance from expected contingent acquisition payment, cancellation fees of repurchased ADSs and returned ADSs, fair value loss on derivative liabilities, loss on disposal of subsidiaries and investment in equity investee, and unrealized investment loss. The Company defines non-GAAP net margin as non-GAAP net income (loss) as a percentage of total net revenues. The Company defines non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. as net income (loss) attributable to ordinary shareholders of Baozun Inc. excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill and investments, loss on variance from expected contingent acquisition payment, cancellation fees of repurchased ADSs and returned ADSs, fair value loss on derivative liabilities, loss on disposal of subsidiaries and investment in equity investee, and unrealized investment loss. The Company defines non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS as non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. divided by weighted average number of shares used in calculating net income (loss) per ordinary share multiplied by three.

The Company presents the non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. Non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that the use of the non-GAAP financial measures facilitates investors to understand and evaluate the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc., and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS is that they do not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the comparability of their financial results to the Company's. In light of the foregoing limitations, the non-GAAP income (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS for the period should not be considered in isolation from or as an alternative to income (loss) from operations, operating margin, net income (loss), net margin, net income (loss) attributable to ordinary shareholders of Baozun Inc. and net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, or other financial measures prepared in accordance with U.S. GAAP.

The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. The company encourages you to review the company's financial information in its entirety and not rely on a single financial measure. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliations of GAAP and Non-GAAP Results."

Safe Harbor Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continues," "ongoing," "targets," "guidance," "going forward," "looking forward," "outlook" or other similar expressions. Statements that are not historical facts, including but not limited to statements about Baozun's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to Baozun's filings with the United States Securities and Exchange Commission and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information provided in this announcement is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date, and Baozun undertakes no obligation to update such information, except as required under applicable law.

About Baozun Inc.

Founded in 2007, Baozun Inc. is a leader in brand e-commerce service, brand management, and digital commerce service.  It serves more than 450 brands from various industries and sectors around the world, including East and Southeast Asia, Europe and North America.

Baozun Inc. comprises three major business lines - Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality and sustainable growth.  Driven by the principle that "Technology Empowers the Future Success", Baozun's business lines are devoted to empowering their clients' business and navigating their new phase of development.

For more information, please visit http://ir.baozun.com.

For investor and media inquiries, please contact:

Baozun Inc.
Ms. Wendy Sun
Email: ir@baozun.com 

 

Baozun Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
		As of
		December 31,  2023		March 31,  2024		March 31,  2024
		RMB		RMB		US$
ASSETS
Current assets
Cash and cash equivalents		2,149,531		1,946,648		269,608
Restricted cash		202,764		352,777		48,859
Short-term investments		720,522		647,239		89,642
Accounts receivable, net		2,184,729		1,713,723		237,348
Inventories		1,045,116		1,084,466		150,197
Advances to suppliers		311,111		264,877		36,685
Prepayments and other current assets		590,350		688,773		95,394
Amounts due from related parties		86,661		86,191		11,937
Total current assets		7,290,784		6,784,694		939,670
Non-current assets
Long term investments		359,129		347,107		48,074
Property and equipment, net		851,151		821,130		113,725
Intangible assets, net		306,420		297,276		41,172
Land use right, net		38,464		38,208		5,292
Operating lease right-of-use assets		1,070,120		952,432		131,910
Goodwill		312,464		312,464		43,276
Other non-current assets		45,316		71,143		9,853
Deferred tax assets		200,628		204,409		28,310
Total non-current assets		3,183,692		3,044,169		421,612
Total assets		10,474,476		9,828,863		1,361,282
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term loan		1,115,721		1,099,789		152,319
Accounts payable		563,562		454,686		62,973
Notes payable		506,629		373,137		51,679
Income tax payables		18,768		12,802		1,773
Accrued expenses and other current liabilities		1,188,179		986,727		136,660
Amounts due to related parties		32,118		4,515		625
Current operating lease liabilities		332,983		301,358		41,738
Total current liabilities		3,757,960		3,233,014		447,767
Non-current liabilities
Deferred tax liabilities		24,966		23,271		3,223
Long-term operating lease liabilities		799,096		708,487		98,124
Other non-current liabilities		40,718		40,115		5,556
Total non-current liabilities		864,780		771,873		106,903
Total liabilities		4,622,740		4,004,887		554,670
Baozun Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
		As of
		December 31,  2023		March 31,  2024		March 31,  2024
		RMB		RMB		US$
Redeemable non-controlling interests		1,584,858		1,590,390		220,266
Baozun Inc. shareholders' equity:
Class A ordinary shares (US$0.0001 par value; 470,000,000 shares authorized, 167,901,880 and 169,928,854 shares issued and outstanding as of December 31, 2023, and March 31, 2024, respectively)		93		95		13
Class B ordinary shares (US$0.0001 par value; 30,000,000 shares authorized, 13,300,738 shares issued and outstanding as of December 31, 2023, and March 31, 2024, respectively)		8		8		1
Additional paid-in capital		4,571,439		4,597,336		636,724
Treasury shares		-		-		-
Accumulated deficit		(506,587)		(573,226)		(79,390)
Accumulated other comprehensive income		32,251		43,887		6,078
Total Baozun Inc. shareholders' equity		4,097,204		4,068,100		563,426
Non-controlling interests		169,674		165,486		22,920
Total equity		4,266,878		4,233,586		586,346
Total liabilities, redeemable non- controlling interests and equity		10,474,476		9,828,863		1,361,282

 

Baozun Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for share and per share data and per ADS data)
		For the three months ended March 31,
		2023		2024
		RMB		RMB		US$
Net revenues
Product sales (1)		666,069		707,524		97,991
Services		1,221,727		1,272,246		176,204
Total net revenues		1,887,796		1,979,770		274,195
Operating expenses (1)
Cost of products		(505,087)		(487,111)		(67,464)
Fulfillment(2)		(567,629)		(546,391)		(75,674)
Sales and marketing (2)		(592,687)		(694,043)		(96,124)
Technology and content(2)		(114,891)		(133,187)		(18,446)
General and administrative(2)		(163,227)		(179,087)		(24,804)
Other operating income, net		15,096		5,269		730
Total operating expenses		(1,928,425)		(2,034,550)		(281,782)
Loss from operations		(40,629)		(54,780)		(7,587)
Other income (expenses)
Interest income		17,853		19,174		2,656
Interest expense		(10,955)		(10,205)		(1,413)
Unrealized investment loss		(42,569)		(17,025)		(2,358)
Exchange loss		(1,345)		(180)		(25)
Loss before income tax and share of income in equity     method investment		(77,645)		(63,016)		(8,727)
Income tax expense (3)		(1,755)		(7,102)		(984)
Share of loss in equity          method investment, net of tax        of nil		224		4,826		668
Net loss		(79,176)		(65,292)		(9,043)
Net loss attributable to noncontrolling interests		523		4,188		580
Net income attributable to redeemable noncontrolling interests		(4,894)		(5,533)		(766)
Net loss attributable to ordinary shareholders of Baozun Inc.		(83,547)		(66,637)		(9,229)
Net loss per share attributable to ordinary shareholders of Baozun Inc.:
Basic		(0.47)		(0.37)		(0.05)
Diluted		(0.47)		(0.37)		(0.05)
Net loss per ADS attributable to ordinary shareholders of Baozun Inc.:
Basic		(1.42)		(1.10)		(0.15)
Diluted		(1.42)		(1.10)		(0.15)
Weighted average shares used in calculating net loss per ordinary share
Basic		176,786,718		181,634,752		181,634,752
Diluted		176,786,718		181,634,752		181,634,752
Net loss		(79,176)		(65,292)		(9,043)
Other comprehensive income, net of tax of nil:
Foreign currency translation adjustment		(7,797)		11,636		1,612
Comprehensive loss		(86,973)		(53,656)		(7,431)

 

(1) Including product sales from E-Commerce and Brand Management of RMB394.6 million and RMB312.9 million for the three months period ended March 31, 2024, respectively, compared with product sales E-Commerce and Brand Management of RMB477.1 million and RMB189.0 million for the three months period ended March 31, 2023.

(2) Share-based compensation expenses are allocated in operating expenses items as follows:

       

		For the three months ended March 31,
		2023		2024
		RMB		RMB		US$
Fulfillment		1,011		2,062		286
Sales and marketing		7,866		10,009		1,386
Technology and content		1,543		4,292		594
General and administrative		9,683		12,961		1,795
		20,103		29,324		4,061

 

(2) Including amortization of intangible assets resulting from business acquisition, which amounted to RMB8.1 million and RMB7.9 million for the three months period ended March 31, 2023 and 2024, respectively.

(3) Including income tax benefits of RMB1.6 million and RMB1.5 million related to the reversal of deferred tax liabilities, which was recognized on business acquisition for the three months period ended March 31, 2023 and 2024, respectively.

 

Baozun Inc.
Reconciliations of GAAP and Non-GAAP Results
(in thousands, except for share and per ADS data)
		For the three months ended March 31,
		2023		2024
		RMB		RMB		US$
Loss from operations		(40,629)		(54,780)		(7,587)
Add: Share-based compensation expenses		20,103		29,324		4,061
Amortization of intangible assets resulting from business acquisition		8,142		7,911		1,095
Acquisition-related expenses		2,709		-		-
Non-GAAP loss from operations		(9,675)		(17,545)		(2,431)
Net loss		(79,176)		(65,292)		(9,043)
Add: Share-based compensation expenses		20,103		29,324		4,061
Amortization of intangible assets resulting from business acquisition		8,142		7,911		1,095
Acquisition-related expenses		2,709		-		-
Unrealized investment loss		42,569		17,025		2,358
Less: Tax effect of amortization of intangible assets        resulting from business acquisition		(1,565)		(1,507)		(209)
Non-GAAP net loss		(7,218)		(12,539)		(1,738)
Net loss attributable to ordinary shareholders of Baozun Inc.		(83,547)		(66,637)		(9,229)
Add: Share-based compensation expenses		20,103		29,324		4,061
Amortization of intangible assets resulting from business acquisition		6,233		5,991		830
Acquisition-related expenses		2,709		-		-
Unrealized investment loss		42,569		17,025		2,358
Less: Tax effect of amortization of intangible assets        resulting from business acquisition		(1,188)		(1,127)		(156)
Non-GAAP net loss attributable to ordinary shareholders of Baozun Inc.		(13,121)		(15,424)		(2,136)
Non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. per ADS:
Basic		(0.22)		(0.25)		(0.03)
Diluted		(0.22)		(0.25)		(0.03)
Weighted average shares used in calculating net loss per ordinary share
Basic		176,786,718		181,634,752		181,634,752
Diluted		176,786,718		181,634,752		181,634,752

 

View original content:https://www.prnewswire.com/news-releases/baozun-announces-first-quarter-2024-unaudited-financial-results-302156556.html

SOURCE Baozun Inc.

FAQ

What was Baozun's Q1 2024 revenue growth?

Baozun achieved a 5% year-over-year revenue growth in Q1 2024.

What is Baozun's net loss for Q1 2024?

Baozun reported a net loss of RMB66.6 million for Q1 2024.

How did Baozun's E-Commerce segment perform in Q1 2024?

Baozun's E-Commerce segment turned positive in operating cash flow for the first time since 2019.

What was the growth in Baozun's Brand Management product sales in Q1 2024?

Brand Management product sales increased by 65.6% to RMB312.9 million in Q1 2024.

What was Baozun's operating loss in Q1 2024?

Baozun's operating loss increased to RMB54.8 million in Q1 2024.

How did digital marketing and IT solutions revenue change for Baozun in Q1 2024?

Revenue from digital marketing and IT solutions saw double-digit growth in Q1 2024.

What was Baozun's cash and cash equivalents at the end of Q1 2024?

Baozun's cash and cash equivalents were RMB2,946.7 million as of March 31, 2024.

Did Baozun's operating margin improve or decline in Q1 2024?

Baozun's operating margin declined to negative 2.8% in Q1 2024.