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Baozun Announces Second Quarter 2024 Unaudited Financial Results

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Baozun (Nasdaq: BZUN) announced its unaudited Q2 2024 financial results. Total net revenues grew by 3.1% year-over-year to RMB2,391.0 million (US$329.0 million). The company reported a net loss of RMB30.6 million (US$4.2 million), up from RMB20.0 million in the same quarter of 2023. Non-GAAP net loss improved to RMB3.9 million (US$0.5 million) from RMB4.4 million last year. E-Commerce revenue increased after ten quarters of contraction, aided by a 10.4% rise in service revenue. Integration of Location, a Douyin partner, bolstered the company's livestreaming capabilities. Brand Management's operating losses shrunk as store expansion accelerated. Notably, Baozun achieved a 3% annual revenue growth and significant improvement in non-GAAP operating profits. However, product sales revenue dropped by 4.4% to RMB579.2 million (US$79.7 million) for E-Commerce and by 9.8% to RMB292.3 million (US$40.2 million) for Brand Management. The company repurchased approximately 2.0 million ADSs worth US$4.9 million year-to-date.

Baozun (Nasdaq: BZUN) ha annunciato i suoi risultati finanziari non certificati per il secondo trimestre del 2024. Le entrate totali nette sono cresciute del 3,1% rispetto all'anno precedente, raggiungendo RMB2.391,0 milioni (US$329,0 milioni). L'azienda ha riportato una perdita netta di RMB30,6 milioni (US$4,2 milioni), in aumento rispetto ai RMB20,0 milioni dello stesso trimestre del 2023. La perdita netta non-GAAP è migliorata a RMB3,9 milioni (US$0,5 milioni) rispetto ai RMB4,4 milioni dell'anno scorso. Le entrate dell'e-commerce sono aumentate dopo dieci trimestri di contrazione, sostenute da un incremento del 10,4% delle entrate per servizio. L'integrazione di Location, un partner di Douyin, ha potenziato le capacità di livestreaming dell'azienda. Le perdite operative nella gestione del marchio sono diminuite mentre l'espansione dei negozi accelerava. È importante notare che Baozun ha raggiunto una crescita annuale del fatturato del 3% e un significativo miglioramento nei profitti operativi non-GAAP. Tuttavia, le entrate delle vendite dei prodotti sono diminuite del 4,4% a RMB579,2 milioni (US$79,7 milioni) per l'e-commerce e del 9,8% a RMB292,3 milioni (US$40,2 milioni) per la gestione del marchio. L'azienda ha riacquistato circa 2,0 milioni di ADS per un valore di US$4,9 milioni dall'inizio dell'anno.

Baozun (Nasdaq: BZUN) anunció sus resultados financieros no auditados para el segundo trimestre de 2024. Los ingresos netos totales crecieron un 3,1% interanual, alcanzando RMB2.391,0 millones (US$329,0 millones). La compañía reportó una pérdida neta de RMB30,6 millones (US$4,2 millones), un aumento respecto a los RMB20,0 millones en el mismo trimestre de 2023. La pérdida neta no-GAAP mejoró a RMB3,9 millones (US$0,5 millones) desde RMB4,4 millones el año anterior. Los ingresos del comercio electrónico aumentaron tras diez trimestres de contracción, impulsados por un aumento del 10,4% en los ingresos por servicios. La integración de Location, un socio de Douyin, fortaleció las capacidades de transmisión en vivo de la empresa. Las pérdidas operativas en la gestión de marca disminuyeron a medida que se aceleró la expansión de tiendas. Es notable que Baozun logró un crecimiento anual de ingresos del 3% y una mejora significativa en las ganancias operativas no-GAAP. Sin embargo, los ingresos por ventas de productos cayeron un 4,4% a RMB579,2 millones (US$79,7 millones) para comercio electrónico y un 9,8% a RMB292,3 millones (US$40,2 millones) para la gestión de marcas. La compañía recompró aproximadamente 2,0 millones de ADS por un valor de US$4,9 millones desde principios de año.

바오준(Baozun) (Nasdaq: BZUN)은 2024년 2분기 감사되지 않은 재무 결과를 발표했습니다. 총 순수익은 전년 대비 3.1% 성장하여 RMB2,391.0 백만(미화 3억 2,900만 달러)에 달했습니다. 회사는 RMB30.6 백만(미화 420만 달러)의 순손실을 보고했으며, 이는 2023년 같은 분기의 RMB20.0 백만에서 증가한 수치입니다. 비-GAAP 순손실은 작년의 RMB4.4 백만에서 RMB3.9 백만(미화 50만 달러)으로 개선되었습니다. 전자상거래 수익은 서비스 수익의 10.4% 증가로 10분기 연속 감소 후 증가했습니다. Douyin 파트너인 Location의 통합은 회사의 라이브 스트리밍 능력을 강화했습니다. 브랜드 관리의 운영 손실은 매장 확장이 가속화됨에 따라 줄어들었습니다. 특히, 바오준은 연간 수익이 3% 증가하고 비-GAAP 운영 이익이显著 개선되었습니다. 그러나 제품 판매 수익은 전자상거래에서 4.4% 감소하여 RMB579.2 백만(미화 7970만 달러)로, 브랜드 관리에서 9.8% 감소하여 RMB292.3 백만(미화 4020만 달러)으로 떨어졌습니다. 회사는 올해 초부터 약 200만 ADS를 미화 490만 달러에 재매입했습니다.

Baozun (Nasdaq: BZUN) a annoncé ses résultats financiers non audités pour le deuxième trimestre 2024. Les revenus nets totaux ont augmenté de 3,1 % par rapport à l'année précédente, atteignant 2 391,0 millions RMB (329,0 millions USD). L'entreprise a enregistré une perte nette de 30,6 millions RMB (4,2 millions USD), en hausse par rapport à 20,0 millions RMB au même trimestre en 2023. La perte nette non-GAAP s'est améliorée à 3,9 millions RMB (0,5 million USD) contre 4,4 millions RMB l'année précédente. Les revenus e-commerce ont augmenté après dix trimestres de contraction, soutenus par une augmentation de 10,4 % des revenus de services. L'intégration de Location, un partenaire de Douyin, a renforcé les capacités de diffusion en direct de l'entreprise. Les pertes opérationnelles dans la gestion de marque ont diminué alors que l'expansion des magasins s'accélérait. Il convient de noter que Baozun a enregistré une croissance annuelle des revenus de 3 % et une amélioration significative des bénéfices d'exploitation non-GAAP. Cependant, les revenus des ventes de produits ont chuté de 4,4 % à 579,2 millions RMB (79,7 millions USD) pour le e-commerce et de 9,8 % à 292,3 millions RMB (40,2 millions USD) pour la gestion de marque. L'entreprise a racheté environ 2,0 millions d'ADS d'une valeur totale de 4,9 millions USD depuis le début de l'année.

Baozun (Nasdaq: BZUN) gab seine nicht geprüften Finanzzahlen für das zweite Quartal 2024 bekannt. Die gesamten Nettoumsätze stiegen im Jahresvergleich um 3,1% auf RMB2.391,0 Millionen (US$329,0 Millionen). Das Unternehmen meldete einen Nettoverlust von RMB30,6 Millionen (US$4,2 Millionen), was einem Anstieg von RMB20,0 Millionen im gleichen Quartal 2023 entspricht. Der nicht-GAAP Nettoverlust verbesserte sich auf RMB3,9 Millionen (US$0,5 Millionen) im Vergleich zu RMB4,4 Millionen im Vorjahr. Die E-Commerce-Einnahmen stiegen nach zehn aufeinanderfolgenden Quartalen des Rückgangs, unterstützt durch einen Anstieg der Dienstleistungseinnahmen um 10,4%. Die Integration von Location, einem Partner von Douyin, stärkte die Live-Streaming-Fähigkeiten des Unternehmens. Die Betriebskosten im Markenmanagement sanken, als die Geschäftserweiterung voranschritt. Bemerkenswert ist, dass Baozun ein jährliches Umsatzwachstum von 3% und eine signifikante Verbesserung des nicht-GAAP Betriebsergebnisses erzielte. Die Einnahmen aus Produktverkäufen hingegen fielen im E-Commerce um 4,4% auf RMB579,2 Millionen (US$79,7 Millionen) und im Markenmanagement um 9,8% auf RMB292,3 Millionen (US$40,2 Millionen). Das Unternehmen hat seit Jahresbeginn etwa 2,0 Millionen ADS im Wert von 4,9 Millionen US-Dollar zurückgekauft.

Positive
  • Total net revenues grew by 3.1% year-over-year to RMB2,391.0 million (US$329.0 million).
  • Non-GAAP net loss improved to RMB3.9 million (US$0.5 million) from RMB4.4 million last year.
  • E-Commerce revenue increased after ten quarters of contraction.
  • Service revenue rose by 10.4%.
  • Annual revenue growth was 3%.
  • Significant improvement in non-GAAP operating profits.
  • Reduction in Brand Management's operating losses.
Negative
  • Net loss increased to RMB30.6 million (US$4.2 million) from RMB20.0 million last year.
  • Product sales revenue for E-Commerce dropped by 4.4% to RMB579.2 million (US$79.7 million).
  • Product sales revenue for Brand Management decreased by 9.8% to RMB292.3 million (US$40.2 million).

Insights

Baozun's Q2 2024 results show mixed signals. While total revenue grew 3.1% year-over-year to RMB2,391.0 million, the company still reported a net loss of RMB30.6 million. However, there are some positive trends:

  • E-Commerce revenue returned to growth after 10 quarters of contraction
  • Non-GAAP operating profit improved to RMB10.0 million from RMB0.7 million last year
  • Brand Management reduced operating losses

The integration of Location, a top Douyin partner, could strengthen Baozun's position in livestreaming e-commerce. However, investors should monitor the continued losses in Brand Management and weak offline traffic affecting product sales. The 3% revenue growth is modest and sustaining this momentum will be important for Baozun's turnaround efforts.

Baozun's Q2 results highlight the shifting dynamics in China's e-commerce landscape. The 10.4% growth in service revenue, particularly in sportswear store operations and digital marketing, indicates brands are increasingly relying on specialized e-commerce services. The focus on omni-channel expansion, with 45.8% of brand partners using at least two channels, aligns with current retail trends.

However, the 4.4% decrease in E-Commerce product sales revenue suggests challenges in the distribution model, especially in electronics and FMCG sectors. This could reflect increased competition or changing consumer preferences. The integration of Location and emphasis on the Douyin ecosystem shows Baozun is adapting to the rise of social commerce and livestreaming, which could be important for future growth in China's evolving digital marketplace.

Baozun's Q2 results reflect broader market trends in China's retail sector. The weak offline traffic impacting Brand Management's product sales (9.8% decrease) aligns with the ongoing shift towards online shopping. However, the improved visitor conversion rate suggests effective strategies in a challenging environment.

The double-digit growth in digital marketing and IT solutions revenue (17% increase) indicates increasing demand for advanced e-commerce technologies. This trend may accelerate as brands seek to differentiate themselves in a crowded online marketplace. The emphasis on omni-channel strategies and the integration of social commerce platforms like Douyin show Baozun is positioning itself for the next phase of retail evolution in China. Investors should watch how these initiatives translate into profitability in coming quarters.

SHANGHAI, Aug. 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 second quarter ended June 30, 2024.

Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, commented, "I'm pleased that in the second quarter, E-Commerce revenue returned to growth after ten quarters of contraction, highlighting our effective revitalization efforts in both services and product sales. Additionally, we smoothly integrated Location, a top Douyin partner, into Baozun's livestreaming business unit. This integration strengthened our value proposition in the Douyin ecosystem. Brand Management continued to reduce its operating losses and accelerated its store expansion plans. We have also been working more closely with Gap Inc to maximize its global assets in the Chinese market. With improved momentum in E-commerce and ongoing progress in building Brand Management, we remain committed to our strategic transformation to drive further growth."

Ms. Catherine Zhu, Chief Financial Officer of Baozun Inc., commented, "I'm delighted to report that Baozun achieved 3% year-over-year revenue growth, and significant annual improvement in non-GAAP operating profits. We anticipate this revenue growth momentum will persist for the remainder of 2024. In addition, we are advancing our sustainability initiatives and are well on track to fulfill our commitment to creating long-term value for our shareholders. Year to date, Baozun has repurchased approximately 2.0 million ADSs for $4.9 million, reflecting our confidence in the company's future."

Second Quarter 2024 Financial Highlights

  • Total net revenues were RMB2,391.0 million (US$[1]329.0 million), representing an increase of 3.1% compared with RMB2,320.2 million for the same period of 2023.
  • Loss from operations was RMB18.8 million (US$2.6 million), an improvement from RMB36.4 million in the same quarter of last year which was mainly due to a reduction in losses from Brand Management. Operating margin was negative 0.8%, an improvement from negative 1.6% for the same period of 2023.
  • Non-GAAP income from operation[2] was RMB10.0 million (US$1.4 million), an improvement from RMB0.7 million in the same quarter of last year which was mainly due to a reduction in losses from Brand Management. Non-GAAP operating margin was 0.4%, improved from 0.03% for the same period of 2023.
    • Adjusted operating profit of E-Commerce[3] was RMB60.2 million (US$8.3 million), largely in line with RMB60.8 million for the same period of 2023.
    • Adjusted operating loss of Brand Management[3] was RMB50.0 million (US$6.9 million), an improvement from RMB60.1 million for the same period of 2023.
  • Net loss attributable to ordinary shareholders of Baozun Inc. was RMB30.6 million (US$4.2 million), compared with RMB20.0 million for the same period of 2023.
  • Non-GAAP net loss attributable to ordinary shareholders of Baozun Inc.[4] was RMB3.9 million (US$0.5 million), compared with RMB4.4 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 RMB0.51 (US$0.07), compared with both RMB0.34 for the same period of 2023.
  • Diluted non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. per ADS[6] was RMB0.06 (US$0.01), compared with RMB0.07 for the same period of 2023.
  • Cash and cash equivalents, restricted cash, and short-term investments totaled RMB2,853.3 million (US$392.6 million), as of June 30, 2024, compared with RMB3,072.8 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 RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 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] 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 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"

BEC 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, the total service revenue achieved a 10.4% year-over-year 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 second quarter, approximately 45.8% 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, our Brand Management business line includes the Gap and Hunter brands. During the quarter, product sales revenue for Brand Management totaled RMB292.3 million, with a gross profit margin of 52.3%.

Second Quarter 2024 Financial Results

Total net revenues were RMB2,391.0 million (US$329.0 million), an increase of 3.1% from RMB2,320.2 million in the same quarter of last year. The increase in total net revenues was mainly driven by a 9.4% increase in service revenue.

Total product sales revenue was RMB870.3 million (US$119.8 million), compared with RMB930.3 million in the same quarter of last year, of which:

  • Product sales revenue of E-Commerce was RMB579.2 million (US$79.7 million), a decrease of 4.4% from RMB606.1 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 electronics and fast-moving consumer goods sectors.

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 June 30,


2023


2024


RMB


% of
Net
Revenues


RMB


US$


% of
Net
Revenues


YoY
Change


(In millions, except for percentage)

Product Sales of E-Commerce












Appliances

276.0


12 %


264.2


36.4


11 %


-4 %

Beauty and cosmetics

104.4


4 %


107.9


14.8


5 %


3 %

Others

225.7


10 %


207.1


28.5


8 %


-8 %

Total net revenues from product
sales of E-Commerce

606.1


26 %


579.2


79.7


24 %


-4 %

  • Product sales revenue of Brand Management was RMB292.3 million (US$40.2 million), a decrease of 9.8% from RMB324.2 million in the same quarter of last year. The decrease was primarily due to weak offline traffic during the quarter, partially offset by an improved visitor conversion rate.

Services revenue was RMB1,520.7 million (US$209.3 million), an increase of 9.4% from RMB1,389.9 million in the same quarter of last year. The increase was primarily due to the double-digit growth in digital marketing and IT solutions and online store operations.

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


For the three months ended June 30,


2023


2024


RMB


% of
Net
Revenues


RMB


US$


% of
Net
Revenues


YoY
Change


(In millions, except for percentage)

Services revenue












Online store operations

388.3


17 %


441.4


60.8


18 %


14 %

Warehousing and fulfillment

570.5


25 %


587.8


80.9


25 %


3 %

Digital marketing and IT solutions

446.2


19 %


520.5


71.6


22 %


17 %

Inter-segment eliminations8

-15.1


-1 %


-29.0


-4.0


-1 %


92 %

Total net revenues from services

1,389.9


60 %


1,520.7


209.3


64 %


9 %

























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

    


For the three months ended June 30,


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

258.3


11 %


317.8


43.7


13 %


23 %

-          Luxury

97.9


4 %


96.9


13.3


4 %


-1 %

-          Sportswear

95.0


4 %


117.1


16.1


5 %


23 %

-          Other apparel

65.4


3 %


103.8


14.3


4 %


59 %

Others

130.0


6 %


123.6


17.1


6 %


-5 %

Inter-segment eliminations10

-9.3


-1 %


-12.0


-1.7


-1 %


29 %

Total net revenues from online
store operations in services

379.0


16 %


429.4


59.1


18 %


13 %













[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.

[8] The inter-segment eliminations mainly consist of revenues from online store operations, warehousing and fulfillment, and 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 expenses were RMB2,409.8 million (US$331.6 million), compared with RMB2,356.6 million in the same quarter of last year.

  • Cost of products was RMB649.7 million (US$89.4 million), compared with RMB675.1 million in the same quarter of last year. The decrease was primarily due to a decline in product sales volume.
  • Fulfillment expenses were RMB627.0 million (US$86.3 million), compared with RMB658.7 million in the same quarter of last year. The decrease was primarily attributable to the Company's cost control initiatives and efficiency improvements.
  • Sales and marketing expenses were RMB844.7 million (US$116.2 million), compared with RMB706.4 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 RMB129.8 million (US$17.9 million), compared with RMB129.1 million in the same quarter of last year. The expenses were largely in line with same period last year.
  • General and administrative expenses were RMB171.6 million (US$23.6 million), compared with RMB249.5 million in the same quarter of last year. The decrease was primarily due to higher G&A expenses in the same period of last year, which included higher severance expenses following the acquisition of Gap Shanghai. Additionally, decrease reflects the Company's cost control initiatives and efficiency improvements.

Loss from operations was RMB18.8 million (US$2.6 million), an improvement from RMB36.4 million in the same quarter of last year. Operating margin was negative 0.8%, an improvement from negative 1.6% in the same quarter of last year.

Non-GAAP income from operations was RMB10.0 million (US$1.4 million), an improvement from RMB0.7 million in the same quarter of last year. The increase was mainly due to the narrowed loss in the Brand Management business. Non-GAAP operating margin was 0.4%, up from 0.03% in the same quarter of last year.

Adjusted operating profit of E-Commerce was RMB60.2 million (US$8.3 million), largely in line with RMB60.8 million in the same quarter of last year. Adjusted operating loss of Brand Management was RMB50.0 million (US$6.9 million), an improvement from RMB60.1 million in the same quarter of last year.

Unrealized investment loss was RMB2.8 million (US$0.4 million), compared with RMB9.3 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 iClick Interactive Asia Group Limited, or iClick Interactive, a public company listed on the Nasdaq Global Market that the Company invested in January 2021.

Share of loss in equity method investment was RMB3.6 million (US$0.5 million), compared with a share of gain in equity method investment of RMB4.4 million in the same quarter of last year. The change to a share of loss in equity method investment in this quarter was primarily due to the allocation of losses related to the equity method investment during the current period.

Net loss attributable to ordinary shareholders of Baozun Inc. was RMB30.6 million (US$4.2 million), compared with RMB20.0 million in the same quarter of last year.

Basic and diluted net loss attributable to ordinary shareholders of Baozun Inc. per ADS were both RMB0.51 (US$0.07), compared with both RMB0.34 for the same period of 2023.

Non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. was RMB3.8 million (US$0.5 million), compared with RMB4.4 million in the same quarter of last year.

Diluted non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. per ADS were RMB0.06 (US$0.01), compared with RMB0.07 for the same period of 2023.

Segment Information

(a) Description of segments

Following the acquisition of Gap Shanghai in February 2023, 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 June 30, 2023 and 2024, with prior periods' segment information retrospectively recast to conform to current period presentation:



For the three months ended June 30,



2023


2024



RMB


RMB

Net revenues:





E-Commerce


2,010,976


2,130,881

Brand Management 


324,297


294,283

Inter-segment eliminations *


(15,112)


(34,170)

Total consolidated net revenues

2,320,161


2,390,994











Adjusted Operating Profits (Losses) **:



E-Commerce


60,828


60,212

Brand Management


(60,090)


(49,976)

Total Adjusted Operating Profits

738


10,236

Inter-segment eliminations *


-


(200)

Unallocated expenses:





  Share-based compensation expenses

(29,264)


(17,478)

  Amortization of intangible assets
resulting from business acquisition   

(7,911)


(10,916)

  Cancellation fees of repurchased ADSs


-


(415)

Total other expenses


22,337


4,163

Loss before income tax


(14,100)


(14,610)


*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, and cancellation fees of repurchased ADSs.

Update in Share Repurchase Programs

On January 24, 2024, the Company's board of directors (the "Board") 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. As of August 28, 2024, the Company repurchased approximately 2.0 million of ADSs for approximately US$4.9 million under its share repurchase program through the open market. The remaining amount of Board authorization for our share repurchase program, which is effective through January 2025, was US$15.1 million as of August 28, 2024.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Wednesday, August 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:                                9965929

A replay of the conference call may be accessible through September 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:              6727395

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 diluted 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 diluted 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  diluted 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  diluted 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  diluted 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


June 30,
2024


June 30,
2024



RMB


RMB


US$




ASSETS







Current assets







Cash and cash equivalents

2,149,531


1,454,517


200,148


Restricted cash

202,764


242,679


33,394


Short-term investments

720,522


1,156,066


159,080


Accounts receivable, net

2,184,729


1,842,127


253,485


Inventories

1,045,116


1,130,958


155,625


Advances to suppliers

311,111


309,996


42,657


Derivative financial assets

-


11,179


1,538


Prepayments and other current assets

590,350


678,240


93,329


Amounts due from related parties

86,661


55,874


7,689


Total current assets

7,290,784


6,881,636


946,945


Non-current assets







Long term investments

359,129


364,524


50,160


Property and equipment, net

851,151


816,127


112,303


Intangible assets, net

306,420


350,330


48,207


Land use right, net

38,464


37,951


5,222


Operating lease right-of-use assets

1,070,120


857,192


117,954


Goodwill

312,464


369,333


50,822


Other non-current assets

45,316


67,943


9,349


Deferred tax assets

200,628


198,700


27,342


Total non-current assets

3,183,692


3,062,100


421,359


Total assets

10,474,476


9,943,736


1,368,304


LIABILITIES AND SHAREHOLDERS'
EQUITY







Current liabilities







Short-term loan

1,115,721


1,162,824


160,010


Accounts payable

563,562


439,635


60,497


Notes payable

506,629


418,386


57,572


Income tax payables 

18,768


10,255


1,411


Accrued expenses and other current liabilities

1,188,179


1,020,799


140,466


Amounts due to related parties

32,118


22,553


3,103


Current operating lease liabilities

332,983


277,004


38,117


Total current liabilities

3,757,960


3,351,456


461,176


Non-current liabilities







Deferred tax liabilities

24,966


36,628


5,040


Long-term operating lease liabilities

799,096


647,321


89,074


Other non-current liabilities

40,718


40,030


5,508


Total non-current liabilities

864,780


723,979


99,622


Total liabilities

4,622,740


4,075,435


560,798


Redeemable non-controlling interests

1,584,858


1,645,177


226,384


Baozun Inc. shareholders' equity:







Class A ordinary shares (US$0.0001 par value;
470,000,000 shares authorized, 167,901,880 and 1
70,820,931 shares issued, 167,901,880 and
167,277,325 shares outstanding, as of December
31, 2023, and June 30, 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 June 30, 2024, respectively)

8


8


1


Additional paid-in capital 

4,571,439


4,609,277


634,258


Treasury shares (nil and 3,543,606 shares as of
December 31,2023 and June 30,2024,
respectively)

-


(21,630)


(2,976)


Accumulated deficit

(506,587)


(603,844)


(83,092)


Accumulated other comprehensive income

32,251


50,215


6,910


Total Baozun Inc. shareholders' equity

4,097,204


4,034,121


555,114


Non-controlling interests

169,674


189,003


26,008


Total equity

4,266,878


4,223,124


581,122


Total liabilities, redeemable non-controlling
interests and equity 

10,474,476


9,943,736


1,368,304


 

 

 

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 June 30,


2023


2024


RMB


RMB


US$



Net revenues






Product sales(1)

930,256


870,301


119,757

Services

1,389,905


1,520,693


209,255

Total net revenues

2,320,161


2,390,994


329,012

Operating expenses (1)






Cost of products

(675,050)


(649,696)


(89,401)

Fulfillment(2)

(658,652)


(626,958)


(86,272)

Sales and marketing (2)

(706,440)


(844,698)


(116,234)

Technology and content(2)

(129,142)


(129,788)


(17,859)

General and administrative(2)

(249,503)


(171,637)


(23,618)

Other operating income, net

62,189


13,010


1,789

Total operating expenses 

(2,356,598)


(2,409,767)


(331,595)

Loss from operations

(36,437)


(18,773)


(2,583)

Other income (expenses)






Interest income 

20,286


16,695


2,297

Interest expense 

(9,763)


(10,436)


(1,436)

Unrealized investment loss

(9,305)


(2,830)


(389)

Gain on acquisition of subsidiaries

3,251


-


-

Exchange loss

-6647


-10418


-1434

Fair value change on financial instruments

24,515


11,152


1,535

Loss before income tax and share of income in equity
method investment

(14,100)


(14,610)


(2,010)

Income tax expense (3)

(2,350)


(3,763)


(518)

Share of loss in equity method investment, net of tax of nil

4,432


(3,616)


(498)

Net loss

(12,018)


(21,989)


(3,026)

Net loss attributable to
noncontrolling interests

4,268


5,862


807

Net income attributable to
redeemable noncontrolling interests

(12,278)


(14,493)


(1,994)

Net loss attributable to ordinary shareholders of
Baozun Inc.

(20,028)


(30,620)


(4,213)

Net loss per share attributable to ordinary
shareholders of Baozun Inc.:






Basic

(0.11)


(0.17)


(0.02)

Diluted

(0.11)


(0.17)


(0.02)

Net loss per ADS attributable to ordinary
shareholders of Baozun Inc.:






Basic

(0.34)


(0.51)


(0.07)

Diluted

(0.34)


(0.51)


(0.07)

Weighted average shares used in calculating net loss
per ordinary share






Basic

177,967,788


181,899,568


181,899,568

Diluted

177,967,788


181,899,568


181,899,568

Net loss

(12,018)


(21,989)


(3,026)

Other comprehensive income, net of tax of nil: 






Foreign currency translation adjustment

39,523


6,328


871

Comprehensive loss

27,505


(15,661)


(2,155)

 

(1)     Including product sales from E-Commerce and Brand Management of RMB579.2 million and RMB292.3 million for the three months period ended June 30, 2024, respectively, compared with product sales E-Commerce and Brand Management of RMB606.1 million and RMB324.2 million for the three months period ended June 30, 2023.

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

       


For the three months ended June 30,


2023


2024


RMB


RMB


US$







Fulfillment

1,713


1,358


187

Sales and marketing

10,456


2,242


308

Technology and content

3,512


2,446


337

General and administrative

13,583


11,432


1,573


29,264


17,478


2,405

 

(3) Including amortization of intangible assets resulting from business acquisition, which amounted to RMB7.9 million and RMB10.9 million for the three months period ended June 30, 2023 and 2024, respectively.

(4) Including income tax benefits of RMB1.5 million and RMB2.3 million related to the reversal of deferred tax liabilities for the three months period ended June 30, 2023 and 2024, respectively, which was recognized on business acquisition.

 

Baozun Inc.

Reconciliations of GAAP and Non-GAAP Results

(in thousands, except for share and per ADS data) 






For the three months ended June 30,



2023


2024



RMB


RMB


US$




Loss from operations  

(36,437)


(18,773)


(2,583)


Add: Share-based compensation expenses

29,264


17,478


2,405


Amortization of intangible assets resulting
from business acquisition

7,911


10,916


1,502


Cancellation fees of repurchased ADSs

-


415


57


Non-GAAP Income from operations 

738


10,036


1,381


Net loss

(12,018)


(21,989)


(3,026)


Add: Share-based compensation expenses

29,264


17,478


2,405


Amortization of intangible assets resulting
from business acquisition

7,911


10,916


1,502


Cancellation fees of repurchased ADSs

-


415


57


  Unrealized investment loss

9,305


2,830


389


Less: Gain on acquisition of subsidiaries

(3,251)


-


-


Fair value gain on derivative liabilities

(24,515)


-


-


Tax effect of amortization of intangible assets resulting from
business acquisition

(1,507)


(2,259)


(311)


Non-GAAP net income

5,189


7,391


1,016


Net loss attributable to ordinary shareholders of Baozun Inc.

(20,028)


(30,620)


(4,213)


Add: Share-based compensation expenses

29,264


17,478


2,405


Amortization of intangible assets resulting from
business acquisition

5,991


7,523


1,035


Cancellation fees of repurchased ADSs

-


415


57


Unrealized investment loss

9,305


2,830


389


Less: Gain on acquisition of subsidiaries

(3,272)


-


-


Fair value gain on derivative liabilities

(24,515)


-


-


   Tax effect of amortization of intangible assets
resulting from business acquisition

(1,127)


(1,510)


(208)


Non-GAAP net loss attributable to ordinary
shareholders of Baozun Inc.

(4,382)


(3,884)


(535)


Diluted non-GAAP net income (loss) attributable
to ordinary shareholders of Baozun Inc. per ADS

(0.07)


(0.06)


(0.01)


Weighted average shares used in calculating
diluted net loss per ordinary share

177,967,788


181,899,568


181,899,568


 

 

(1)     The Company evaluated the non-GAAP adjustments items and concluded that these items have immaterial income tax effects except for amortization of intangible assets resulting from business acquisition.

 

Cision View original content:https://www.prnewswire.com/news-releases/baozun-announces-second-quarter-2024-unaudited-financial-results-302232811.html

SOURCE Baozun Inc.

FAQ

How did Baozun's Q2 2024 revenue perform?

Baozun's total net revenues grew by 3.1% year-over-year to RMB2,391.0 million (US$329.0 million).

What was Baozun's net loss for Q2 2024?

Baozun reported a net loss of RMB30.6 million (US$4.2 million) for Q2 2024.

Did Baozun's E-Commerce revenue increase in Q2 2024?

Yes, Baozun's E-Commerce revenue increased after ten quarters of contraction.

How did Baozun's service revenue perform in Q2 2024?

Baozun's service revenue rose by 10.4% in Q2 2024.

What is Baozun's stock symbol?

Baozun is listed under the stock symbol BZUN on Nasdaq.

How many ADSs did Baozun repurchase in 2024?

Baozun repurchased approximately 2.0 million ADSs worth US$4.9 million year-to-date.

Baozun Inc. American Depositary Shares

NASDAQ:BZUN

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