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Chinese e-commerce giant JD.com Inc. reported better-than-expected revenue for the second quarter of the year as China’s Covid lockdowns boosted online shopping and the company’s “618” shopping event.
The company reported second-quarter revenue of 267.6 billion yuan ($39.07 billion), up 5.4% from a year earlier, higher than analysts’ average estimate of 262.31 billion yuan in a Reuters’ poll. Revenue increased by 11% in the first half to 507.3 billion yuan.
JD.com said net income attributable to ordinary shareholders rose to 4.38 billion yuan, or 1.37 yuan per American Depository Share (ADS) for the second quarter, from 794 million yuan, or 0.25 yuan per ADS, a year earlier. Excluding one-off items, it posted a profit of 4.06 yuan per ADS, compared with analysts’ expectations of 2.71 yuan.
Sales in its product segment, which includes online retail sales, rose 2.9% in the quarter, while those from services such as logistics and marketing jumped 21.9%.
China saw a resurgence of Covid-19 in the second quarter which led to lockdowns of major cities across the country, including the financial hub of Shanghai, as authorities tried to contain the worst Covid outbreak since the initial spread in 2020.
“The second quarter is the most challenging quarter since we’re listed,” JD.com Chief Executive Xu Lei said on a call with analysts, adding that the challenges were mainly due to the pandemic.
JD.com reduced marketing and general and administrative expenses for the quarter compared to the same period last year. It also narrowed losses in its new business segment and saw its logistics unit swing to an operating profit in the quarter versus the second quarter of 2021.
“We were pleased to post topline growth that outpaced the industry during a challenging period, as well as healthy profitability and cash flow,” Sandy Xu, chief financial officer, said in a press release.
“Our emphasis on financial discipline and operational efficiency has allowed us to return to shareholders in the form of share repurchases as well as a special cash dividend issued during the quarter. We will continue to focus on generating strong shareholder returns while maintaining our commitment to investing for the long term.”
JD.com’s retail segment makes up the most of its revenue. The division brought in 241.5 billion yuan in revenue in the second quarter, a near 4% rise from a year earlier. Operating profit for the retail business rose 36% from a year ago to 8.17 billion yuan.
That was helped by the 618 shopping festival which takes place in about a roughly two-week period in June and China’s e-commerce giants offer huge discounts across a number of goods. JD.com reported in June that total transaction volume across its platform during the shopping event amounted to 379.3 billion yuan.
Its unit JD Logistics is also expanding its footsteps overseas. Its first automated warehouse in the United States, “Los Angeles No. 2”, was launched in June.