社区

MW Temu parent PDD beats big on earnings - but doesn't take a victory lap

By Emily Bary

PDD says it's focused on the long term as its stock rises in the wake of a massive beat

Temu-parent PDD Holdings Inc. saw its first-quarter revenue more than double and come in far ahead of the consensus view.

PDD $(PDD)$ on Wednesday reported March-quarter revenue of 86.8 billion renminbi ($12.0 billion), up from 37.6 billion renminbi. The latest total trounced the FactSet consensus view, which was for 75.9 billion renminbi.

The company logged net income of 28.0 billion renminbi, or 18.96 renminbi per American depositary share. A year before, PDD posted net income of 8.1 billion renminbi, or 5.55 renminbi a share.

On an adjusted basis, PDD logged 20.72 renminbi in earnings per share. That was nearly double the FactSet consensus of 10.49 renminbi.

Read: Temu and Shein aren't much of a threat to established brands like Nike, Stifel says

PDD's management didn't necessarily take a victory lap in the earnings release.

"In the first quarter, we continued our investment in key areas critical to our high-quality development strategy," Jun Liu, the company's vice president of finance, said in that release. "Rather than focusing on short-term results, we prioritize long-term value creation and remain committed to further deepening our investments in the future."

Priorities for PDD include "improving the overall consumer experience, strengthening our supply chain capabilities and fostering a healthy platform ecosystem," Co-Chief Executive Jiazhen Zhao added.

Shares of PDD were up about 6% in premarket trading Wednesday.

The company operates the Temu marketplace, which is known for offering items at a discount. Temu has been making a big marketing push, including with numerous Super Bowl spots earlier this year.

PDD noted that sales and marketing expenses grew 44% in the first quarter, "mainly due to the increased spending in promotion and advertising activities."

The company also runs Pinduoduo, a social-purchasing platform.

See also: Why are Shein's clothes so cheap? Some shoppers want the answer - and so do a lot of critics

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 22, 2024 08:19 ET (12:19 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.