JD.com Stock Dips as Q2 Profit Halves, Weighed by Costly Food Delivery

TMTPOST -- The American depositary receipts (ADRs) of JD.com closed around 2.9% lower on Thursday, underperforming the U.S. stock market as S&P 500 index eked out a slim gain of 0.03%, hitting its record for the third straight session. Shares dipped as China’s No. 1 online retailer posted mixed financial results, showing its costly food delivery business drove sales while weighing the profit amid intense domestic competition.

Credit：JD.com

JD.com reported net revenue for the quarter ended June 30 surged 22.4% year-over-year (YoY) to RMB356.7 billion ($49.7 billion), about 6.5% above analysts estimated RMB335 billion polled by FactSet. The revenue grew at the fastest pace since the fourth quarter of 2011, prior to the Covid pandemic. JD further accelerated sales with double-digit YoY increase for the third consecutive quarter, up from a 15.8% YoY rise three months ago.

Net income attributable to JD’s ordinary shareholders for the second quarter crashed 50.8% YoY to RMB6.2 billion, still beating analysts’ expectations of RMB3.625 billion. That marks a considerable reversal for the bottom line as net income jumped 36.4% for the March quarter. On non-GAAP basis, JD earned RMB7.4 billion , shedding 49% from a year ago after a YoY gain of 43.8% in net income from January to March. Adjusted earnings per American depositary share (ADS) slumped 49% YoY to RMB4.15, still better than expectation of RMB3.65. The non-GAAP earnings per ADS fell 46.9% YoY to RMB4.97, following at least 40% YoY increase in earnings for the previous two quarters.

JD’s top segment maintained robust growth during the June quarter, thanks to the shopping festival JD 618 Grand Promotion. JD Retails brought RMB310.1 billion with a 20.6% YoY increase, compared with a 16.3% YoY rise three months earlier. Operating income of the core business stood at RMB13.9 billion with a 37.6% YoY increase following a rise of 37.8% for the first quarter.

Revenue from JD Logistics popped 16.6% YoY to RMB51.6 billion following a 11.5% increase for the second quarter. Operating income for the quarter dropped 10.3 YoY to RMB195.8 million, suggesting the second straight quarterly decline after a 35.3% fall for the preceding quarter. JD said the logistics segment in the first half of the year opened new overseas warehouses in multiple countries including the U.S., Britain, France, Poland, South Korea, Vietnam and Saudi Arabia, and in June launched self-operated express delivery brand “JoyExpress” in Saudi Arabia.

The June quarter is the second quarter for JD to record sales from JD Food Delivery under New Businesses, which includes Dada, JD Property,Jingxi and overseas businesses. Revenue from the segment about tripled YoY to RMB13.85 billion, highlighting the booming food delivery business. The segment just reversed a YoY decline with a 18.1% increase in revenue for the March quarter, when sales of JD Food Delivery for the first time was recorded under the segment.

However, the rapid revenue growth of JD Food Delivery was at the cost of deepening losses. New Businesses delivered operating loss of RMB1.48 billion, 21 times more than the loss of RMB69.5 million a year ago. The loss was significantly widened as the March quarter witnessed the loss almost doubling YoY, indicating the drag of costly food delivery push.

JD CEO Sandy Ran Xu said the company saw robust growth in user traffic, quarterly active customers, and user shopping frequency on JD’s platform, driven by sustained momentum across both our core JD Retail business and New Businesses including JD Food Delivery. Xu noted JD Retail achieved a operating margin of 4.5%, a new record for all promotion quarters. JD Food Delivery made healthy progress during the second quarter in metrics such as order volume growth, merchant base expansion, full-time rider recruitment, and more importantly, synergies with retail and other existing businesses of JD, according to Xu, who commented the unit has successfully met JD’s initial strategic goals.

JD has been locked in a price war with Meituan and Alibaba’s Ele.me in a bid to win users since February, in which it forayed into the food delivery. JD and its rivals have continued their aggressive promotions even after pledging to cut back on subsidies following regulators’ warning, which was deemed by analysts as a possible cause of profit squeeze in the second quarter.

Calling the efforts in food delivery a 5, 10, even 20-year initiative, Xu told analysts at an earnings call that JD will focus on “a more refined subsidy strategy tailored to different regions and user groups.” But Morningstar analyst Chelsey Tam said it could be difficult for JD to reduce subsidies quickly, suggesting that earnings could remain under pressure for some time.

"Despite stronger margins in JD retail, increased food delivery spending led to a marginal operating loss, although other income and associate profits supported a positive bottom-line," CFRA analyst Jian Xiong Lim wrote in a note following JD's report. "We see this earnings profile sustaining into (second half) 2025, until the food delivery business reaches scale and its unit economics improve."

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• 发布日期：2025-08-15 11:47:00
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