Q4 2025 Vipshop Holdings Ltd Earnings Call

February 26, 2026

Operator: Ladies and gentlemen, good day, everyone, welcome to Vipshop Holdings Limited's Q4 and full year 2025 Earnings Conference Call. At this time, I would like to turn the call to Ms. Jessie Fan, Vipshop's Head of Investor Relations. Please proceed.

Speaker #2: Thank you, operator. Hello everyone, and thank you for joining VIP Shop's fourth quarter and full year 2025 earnings conference call. With us today are Eric Chen, our Co-Founder, Chairman, and CEO, and Mark Wang, our CFO.

Jessie Fan: Thank you, operator. Hello, everyone, and thank you for joining Vipshop's Q4 and full year 2025 Earnings Conference Call. With us today are Eric Shen, our Co-founder, Chairman, and CEO, and Mark Wang, our CFO. Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our safe harbor statements in our earnings release and public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made.

Speaker #2: Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements, made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995.

Speaker #2: Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our Safe Harbor statements in our earnings release and public filings with the Securities and Exchange Commission, which also apply to this call to the extent any forward-looking statements may be made.

Speaker #2: Please note that certain financial matters used on this call, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop shareholders, and non-GAAP net income per ADS, are not presented in accordance with US GAAP.

Jessie Fan: Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop shareholders, and non-GAAP net income per ADS, are not presented in accordance with the US GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP measures to GAAP measures. With that, I would now like to turn the call over to Mr. Eric Shen.

Speaker #2: Please refer to our earnings release for details relating to the reconciliations of our non-GAAP matters to GAAP matters. With that, I would now like to turn the call over to Mr. Eric Chen.

Speaker #3: Good morning and good evening, everyone. Welcome, and thank you for joining our fourth quarter and full year 2025 earnings conference call. This year has been defined by strategic alignment, operating resilience, and a firm commitment to high-quality growth in a dynamic market.

Eric Ya Shen: Good morning and good evening, everyone. Welcome, and thank you for joining our Q4 and full year 2025 Earnings Conference Call. This year has been defined by strategic realignment, operating resilience, and a firm commitment to high quality growth in a dynamic market. While we entered 2025 facing a multi-consumer environment, I'm pleased to report that the agility of our off-price retail model has allowed us to stabilize our top line performance and continue to deliver robust profitability for the full year. Our Q4 results came in slightly below our expectations. This was primarily due to a deceleration in December sales as customer actives slowed. We attributed it to the weak winter apparel demand, alongside delayed holiday shopping due to a later spring festival. While we saw short-term pressure this quarter, our long-term roadmap remains unchanged.

Speaker #3: While we entered 2025 facing a multi-consumer environment, I'm pleased to report that the agility of our off-price retail model has allowed us to stabilize our top-line performance and continue to deliver robust profitability for the full year.

Speaker #3: Our fourth quarter results came in slightly below our expectations. This was primarily due to a deceleration in December sales as customer actives slowed. We attributed it to weak winter apparel demand, alongside delayed holiday shopping due to a later Spring Festival.

Speaker #3: While we saw short-term pressure this quarter, our long-term roadmap remains unchanged. We continue to make solid progress that reinforces our flywheels, from merchandising and customer engagement to operations.

Eric Ya Shen: We continue to make solid progress that reinforced our flywheels from merchandising, customer engagement to operations. In 2025, we implemented a strategic reorganization of our merchandising and the customer engagement team to enhance agility and long-term competitiveness. By enabling faster decision maker and breaking down internal silos, we have unlocked a strong foundation for long-term growth. Throughout the year, our merchandising strategy centered on three pillars: enhancing customer relevance, building differentiations, and deepening category expertise. Advancing these capabilities has been fundamentally allowing us to consistently and effectively align high-value brand supply with the evolving customer demand. We are building a stronger, more connected portfolio of brand, branded products. Last year, our merchandising team further deepened our supply network. This enable us to acquire more quality, deep discount inventory, driving steadily sales growth across our most valued brands.

Speaker #3: In 2025, we implemented a strategic reorganization of our merchandising and customer engagement team to enhance agility and long-term competitiveness by enabling faster decision-making and breaking down internal silos.

Speaker #3: We have unlocked a strong foundation for long-term growth. Throughout the year, our merchandising strategy centered on three pillars: enhancing customer relevance, building differentiation, and deepening category expertise. Advancing these capabilities has been fundamentally allowing us to consistently and effectively align high-value brand supply with the evolving customer demand.

Speaker #3: We are building a stronger and more connected portfolio of branded products. Last year, our merchandising team further deepened our supply network. This enabled us to acquire more quality deep discount inventory, driving steady sales growth across our most valued brand.

Speaker #3: Leveraging data-driven insights, we are proactively shaping a resilient assortment that wins in growth categories, while keeping our supply chains responsive to shifts in customer needs.

Eric Ya Shen: Leveraging data-driven insights, we are proactively shaping a resilient assortment that win in growth categories while keeping our supply chains responsive to shifts in customer needs. We are seeing encouraging early signal of cross-sell from apparel into related categories, like mother and baby, childcare, and lifestyle. We will remain focused on refining these synergies to better serve our customer diverse needs. Our Made for Vipshop line has become a key driver of our differentiate, with sales in this exclusive categories grow by over 40% to account for 5% of online apparel sales in 2025. Having successfully built these foundations of scale, we are now in the position to evolve our approach for the next stage of growth. We are streamlining our exclusive products to build a clear identity and the drive mind share.

Speaker #3: We are seeing encouraging early signals of cross-sell from apparel into related categories, like mother and baby, childcare, and lifestyle. We will remain focused on refining these signatures to better serve our customers' diverse needs.

Speaker #3: Our made-for-VIP line has become a key driver of differentiation, with sales in this exclusive category growing by over 40% to account for 5% of online apparel sales in 2025.

Speaker #3: Having successfully built this foundation of scale, we are now in the position to evolve our approach for the next stage of growth. We are streamlining our exclusive products to build a clear identity and drive mindshare.

Eric Ya Shen: When customers seeing an exclusive tag, they should instantly recognize a promise of high value and the reliability. This is how we transfer the line into competitive differentiations, a reliably curated on-trend selection, and exceptional value. Our optimistic buying proactive is another key differentiators, allowing us to select a portfolio of high-demand items from top global and domestic partners. This delivers a compelling value proposition based in quality, price, and style. Combined with dynamic fresh sale and the treasure hunt experience, it drives wild customer apparel, fuels excitement, and encourage repeat visits. We are moving faster to lock in more exclusive, low-priced inventory to attract high-value shoppers and deepen the discovery drive viable of our platform. To enhance customer experience, one team now manages the entire journey from initial brand and acquisitions to value-driven growth and lifelong engagement.

Speaker #3: When customers see an exclusive tag, they should instantly recognize a promise of high value and reliability. This is how we transfer the line into competitive differentiations.

Speaker #3: A reliable, courageous on-trend selection and exceptional value. Our optimistic buying proactive is another key differentiator, allowing us to select a portfolio of high-demand items from top global and domestic partners.

Speaker #3: This delivers a compelling value proposition based on quality, price, and style. Combined with dynamic, fresh sales and a treasure hunt experience, it drives wild customer apparel, food excitement, and encourages repeat visits.

Speaker #3: We are moving faster to lock in more exclusive, low-priced inventory to attract high-value shoppers and deepen the discovery drive viability of our platform. To enhance customer experience, one team now manages the entire journey from initial brand and acquisitions to value-driven growth and lifelong engagement.

Speaker #3: We have enhanced our capabilities to target and engage user efficiency, which serves as a co-foundation of our full lifecycle customer strategy. Early progress is promising, and we are focused on the sustainable runway ahead to build a more seamless cross-category experience that makes my life lifetime value.

Eric Ya Shen: We have enhanced our capabilities to target and engage user efficiency, which serves as a core foundation of our full lifecycle customer strategy. Early progress is promising, and we are focused on the sustainable runway ahead to build a more seamless cross-category experience that maximize lifetime value. The Super VIP program remains the cornerstone of our growth. Active SVIP members sustained double-digit growth for Q4. For the full year 2025, active SVIPs grew by 11% to 9.8 million, contributing 52% of our online spending. Through exclusive upgrades, such as provide sales and family benefits, SVIPs consistently demonstrate significantly higher retention and repeat purchase than those of regular customers. Their sustained loyalty and spending power provide a reliable revenue stream and increase our apparel to brand partners, sinking high-quality customer access.

Speaker #3: The Super VIP program remains the cornerstone of our growth. Active SVIP members sustained double-digit growth for the fourth quarter. For the full year 2025, active SVIPs grew by 11% to 9.8 million, contributing 52% of our online spending.

Speaker #3: Through exclusive upgrades, such as providing sales and family benefits, SVIPs consistently demonstrate significantly higher retention and repeat purchase rates than those of regular customers. Their sustained loyalty and spending power provide a reliable revenue stream and increase our appeal to brand partners seeking high-quality customer access.

Speaker #3: Turning to the operations, we have enhanced our capabilities to better align merchandise with customer intent. Delivering measurable results, we implemented multi-objective optimization in our search engine, directly improving conversion rate.

Eric Ya Shen: Turning to the operations, we have enhanced our capabilities to better sync merchandise with customer intent, delivering measurable results. We implemented multi-objective optimization in our searching engine, directly improving conversion rate. We also prioritize diversity and the freshness in our recommendation engine, which has enriched the discovery and drive high browsing frequency and return visits. Look ahead, we are exploring generative search and recommendations to enable more dynamic, interactive, and integrated discovery experience. Lastly, we have made great strides in deploying AI across our business to drive an tangible value. With advanced AI applications in searching and recommendations, customer service, and marketings, we are enhancing the customer experience and empowering our brand partners, laying a stronger, a strong foundation for deeper company-wide integration.

Speaker #3: We also prioritized diversity and freshness in our recommendation engine, which has enriched discovery and driven high browsing frequency and return visits. Looking ahead, we are exploring generative search and recommendations to enable more dynamic interactivity and integrate these discovery experiences.

Speaker #3: Lastly, we have made great strides in deploying AI across our business to drive tangible value. With advanced AI applications in search and recommendations, customer service, and marketing, we are enhancing the customer experience and empowering our brand partners, laying a stronger foundation for deeper company-wide integration.

Speaker #3: Notably, our AI-powered customer service effectively automates routine interactions, improving the overall speed and relevance of customer support. The system now manages the majority of product inquiries and generates personalized recommendations, with an automated resolution rate approaching 90%.

Eric Ya Shen: Notably, our AI-powered customer service effectively automates routine interactions, improving the overall speed and the relevance of customer support. The system now manages the majority of product inquiries and generates the personalized recommendations with a automated resolution rate approaching 90%. AI-generated content is now widely used in marketing, driving efficiency and effectiveness. Taking our own campaign, for example, by leveraging AIGC to automate creativities and placements, we have reduced the production costs while optimize the customer acquisition efficiency. Furthermore, we have used AIGC to generate, summarize our customer reviews and product portfolio, helping brand partners boost their sales effectiveness. With its full-scale launch, our AI virtual try-on feature has proven to be effective driving of customer engagement. Initial data confirm its impact on loyalty, showing that engaged customer has a high rate of repeat visits.

Speaker #3: AI-generated content is now widely used in marketing, driving efficiency and effectiveness. Taking our own campaign for example, by leveraging AIGC to automate creativities and placements, we have reduced the production cost while optimizing customer acquisition efficiency.

Speaker #3: Furthermore, we have used AIGC to generate and summarize our customer reviews and product portfolio, helping brand partners boost their sales effectiveness. With its full-scale launch, our AI virtual try-on feature has proven to be an effective driver of customer engagement.

Speaker #3: Initial data confirmed its impact on loyalty, showing that engaged customers have a high rate of repeat visits. Our next phase is a fundamental integration of AI, moving beyond stand-alone workflows to embed it within our core operations.

Eric Ya Shen: Our next phase is a fundamentally integration of AI, moving beyond stand-alone workflows to embed it within our core operations, making it primarily driver of growth and business-wide efficiency. As we're looking back on 2025, we have become a more agile, customer-central, and technology-driven organizations. We are enhance our leadership in the off-price sector as a indispensable gateway for brand navigations, China's shifting consumption landscape. As value shopping become a structural trend, we are uniquely positioned to capture high-value customers and expand our share of wallet through merchandising and supply chain reliability. While the micro environment remain dynamic, our focused strategy and the strength execution, giving us great confidence in delivering sustainable profitability growth in 2026 and beyond. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Speaker #3: Making it primarily a driver of growth and business-wide efficiency. As we're looking back on 2025, we have become a more agile, customer-centric, and technology-driven organization.

Speaker #3: We are enhancing our leadership in an off-price setting, as in this dispensable gateway for brand navigations trying to shift the consumption landscape. As value shopping becomes a stronger trend, we are uniquely positioned to capture high-value customers and expand our share of wallet through merchandising and supply chain reliability.

Speaker #3: While the micro-environment remains dynamic, our focus strategy and strong execution give us great confidence in delivering sustainable, profitable growth in 2026 and beyond. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Speaker #2: Thanks, Eric. And hello, everyone. We concluded 2025 with resilient performance, underpinned by solid profitability, near dynamic market. This financial strength stems from our discipline, ensuring every dollar we deploy advances our core business and boosts lasting momentum.

Mark Wang: Thanks, Eric. Hello, everyone. We concluded 2025 with resilient performance, underpinned by solid profitability in a dynamic market. This financial strength stems from our disciplined approach to investing in ensuring that every dollar we deploy advance our core business and builds lasting momentum. Over the past year, we focused on enabling the business with agility, ensuring our investments in merchandising, consumer engagement, and operational upgrades, as well as AI enhancements, directly strengthen our business core. This discipline has translate into quality earnings and is building the foundation for durable competitive advantages. As Eric emphasized, we have seen tangible progress, which has repositioned us for sustained momentum. Our focus remains on stewarding our capital to support the business priorities, ensuring we have both the flexibility and the financial foundation to execute our long-term growth strategy.

Speaker #2: Over the past year, we focused on enabling the business with agility, ensuring our investments in merchandising, consumer engagement, and operational upgrades, as well as AI enhancements, directly strengthen our business core.

Speaker #2: This discipline has translated into quality earnings and is building the foundation for durable competitive advantage. As Eric emphasized, we have sustainable progress, which has repositioned us for sustained momentum.

Speaker #2: Our focus remains on stewarding our capital to support this business's priorities, ensuring we have both the flexibility and the financial foundation to execute our long-term growth strategy.

Speaker #2: Turning to capital returns, I'm pleased to confirm that we delivered on our 2025 commitment, returning a total of $944 million to shareholders through dividends and share repurchase.

Mark Wang: Turning to capital returns, I'm pleased to confirm that we delivered on our 2025 commitment, returning a total of $944 million to shareholders through dividends and share repurchase. For 2026, we are maintaining this momentum. Consistent with our prior year's policy. We intend to distribute no less than 75% of our full year 2025 non-GAAP net income, attributable to Vipshop shareholders. This will be executed through an increased annual dividend of approximately $300 million, as well as the continuation of our share repurchase program. These actions reflect our confidence in the company's cash generating capability and our steadfast commitment to shareholder value creation. Now moving to our detailed quarterly financial highlights.

Speaker #2: For 2026, we are maintaining this momentum, consistent with our prior year's policy. We intend to distribute no less than 75% of our full-year 2025 non-GAAP net income.

Speaker #2: Attributable to VIP shareholders. This will be executed through an increased annual dividend of approximately $300 million, as well as the continuation of our share repurchase program.

Speaker #2: These actions reflect our confidence in the company's cash-generating capability, and our steadfast commitment to shareholder value creation. Now, moving to our detailed quarterly financial highlights.

Speaker #2: Before I get started, I would like to clarify that all financial numbers presented below are in RMB, and all percentage changes are year-over-year changes.

Mark Wang: Before I get started, I would like to clarify that all financial numbers present below in yuan Renminbi, and all the percentage change are year-over-year change, unless otherwise noted. Total net revenues for Q4 2025 were RMB 32.5 billion, compared with RMB 33.2 billion in the prior year period. Gross profit was RMB 7.4 billion, compared with RMB 7.6 billion in the prior year period. Gross margin was 22.9%, compared with 23.0% in the prior year period. Total operating expenses decreased by 3.7% year-over-year to RMB 4.9 billion, from RMB 5.1 billion in the prior year period. As a percentage of total net revenues, total operating expenses decreased to 15.0% from 15.2% in the prior year period.

Speaker #2: Unless otherwise noted, total net revenues for the fourth quarter of 2025 were RMB 32.5 billion, compared with RMB 33.2 billion in the prior year period.

Speaker #2: Gross profit was RMB 7.4 billion, compared with RMB 7.6 billion in the prior year period. Gross margin was 22.9%, compared with 23.0% in the prior year period.

Speaker #2: Total operating expenses decreased by 3.7% year over year to RMB 4.9 billion, from RMB 5.1 billion in the prior year period. As a percentage of total net revenues, total operating expenses decreased to 15.0%.

Speaker #2: From 15.2% in the prior year period. Fulfillment expenses decreased by 1.0% year over year, to RMB 2.4 billion from RMB 2.5 billion in the prior year period.

Mark Wang: Fulfillment expenses decreased by 1.0% year-over-year to RMB 2.4 billion, from RMB 2.5 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 7.5%, compared with 7.4% in the prior year period. Marketing expenses decreased by 6.1% year-over-year to RMB 873.7 million, from RMB 933 point million the prior year period. As a percentage of total net revenues, marketing expenses decreased to 2.7% from 2.8% in the prior year period. Technology and content expenses decreased by 9.3% year-over-year to RMB 425.5 million, from RMB 469.2 million in the prior year period.

Speaker #2: As a percentage of total net revenues, fulfillment expenses were 7.5%, compared with 7.4% in the prior year period. Marketing expenses decreased by 6.1% year over year.

Speaker #2: To RMB 873.7 million, from RMB 930.3 million in the prior-year period. As a percentage of total net revenues, marketing expenses decreased to 2.7%.

Speaker #2: From 2.8% in the prior year period. Technology and content expenses decreased by 9.3% year over year, to RMB 425.5 million from RMB 469.2 million.

Speaker #2: In the prior year period, as a percentage of total net revenues, technology and content expenses decreased to 1.3%, from 1.4% in the prior year period.

Mark Wang: As a percentage of total net revenues, technology and content expenses decreased to 1.3% from 1.4% in the prior year period. General and administrative expenses decreased by 5.2% year-over-year to RMB 1.1 billion, from RMB 1.2 billion in the prior year period. As a percentage of total net revenues, general and administrative expenses decreased to 3.5% from 3.6% in the prior year period. Income from operations increased by 1.7% year-over-year to RMB 2.90 billion, from RMB 2.85 billion in the prior year period. Operating margin increased to 8.9% from 8.6% in the prior year period.

Speaker #2: General and administrative expenses decreased by 5.2% year over year to RMB 1.1 billion, from RMB 1.2 billion in the prior-year period. As a percentage of total net revenues, general and administrative expenses decreased to 3.5%.

Speaker #2: From 3.6% in the prior year period. Income from operations increased by 1.7% year over year, to RMB 2.90 billion, from RMB 2.85 billion in the prior year period.

Speaker #2: Operating margin increased to 8.9%, from 8.6% in the prior year period. Non-GAAP income from operations was RMB 3.2 billion, compared with RMB 3.4 billion.

Mark Wang: Non-GAAP income from operations was RMB 3.2 billion, compared with RMB 3.4 billion in the prior year period. Non-GAAP operating margin was 10.0%, compared with 10.2% in the prior year period. Net income attributable to Vipshop shareholders increased by 5.8% year-over-year to RMB 2.6 billion, from RMB 2.4 billion in the prior year period. Net margin attributable to Vipshop shareholders increased to 8.0% from 7.4% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 5.12 from RMB 4.69 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 2.9 billion, compared with RMB 3.0 billion in the prior year period.

Speaker #2: In the prior year period, non-GAAP operating margin was 10.2%, compared with 10.0% in the previous year period. Net income attributable to Vipshop shareholders increased by 5.8%.

Speaker #2: Year over year, to RMB 2.6 billion from RMB 2.4 billion in the prior year period. Net margin attributable to Vipshop shareholders increased to 8.0%.

Speaker #2: From 7.4% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 5.12, from RMB 4.69 in the prior year period.

Speaker #2: Non-GAAP net income attributable to Vipshop shareholders was RMB 2.9 billion, compared with RMB 3.0 billion in the prior-year period. Non-GAAP net margin attributable to Vipshop shareholders was 8.8%.

Mark Wang: Non-GAAP net margin attributable to Vipshop shareholders was 8.8%, compared with 9.0% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS was RMB 5.66, compared with RMB 5.70 in the prior year period. As of 31 December 2025, we had cash and cash equivalents and the restricted cash of RMB 24.1 billion, and short-term investments of RMB 5.8 billion. Now, I will briefly walk through the highlights of our full year results. Total net revenues were RMB 105.9 billion, compared with RMB 108.4 billion in the prior year. Gross profit was RMB 24.5 billion, compared with RMB 25.5 billion in the prior year.

Speaker #2: Compare with 9.0% in the prior-year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS was RMB 5.66, compared with RMB 5.70 in the prior-year period.

Speaker #2: As of December 31, 2025, we had cash and cash equivalents, and restricted cash of RMB 24.1 billion, and short-term investments of RMB 5.8 billion.

Speaker #2: Now, I will briefly walk through the highlights of our full-year results. Total net revenues were RMB 105.9 billion, compared with RMB 108.4 billion in the prior year.

Speaker #2: Gross profit was RMB 24.5 billion, compared with RMB 25.5 billion in the prior year. Gross margin was 23.1%, compared with 23.5% in the prior year.

Mark Wang: Gross margin was 23.1%, compared with 23.5% in the prior year. Income from operations was RMB 8.1 billion, compared with RMB 9.2 billion in the prior year. Operating margin was 7.10%, compared with 8.5% in the prior year. non-GAAP income from operations was RMB 9.9 billion, compared with RMB 10.7 billion in the prior year. non-GAAP operating margin was 9.3%, compared with 9.9% in the prior year. Net income attributable to Vipshop shareholders was RMB 7.2 billion, compared with RMB 7.7 billion in the prior year. Net margin attributable to Vipshop shareholders was 6.8%, compared with 7.1% in the prior year.

Speaker #2: Income from operations was RMB 8.1 billion, compared with RMB 9.2 billion in the prior year. Operating margin was 7.7%, compared with 8.5% in the prior year.

Speaker #2: Non-GAAP income from operations was RMB 9.9 billion, compared with RMB 10.7 billion in the prior year. Non-GAAP operating margin was 9.3%, compared with 9.9% in the prior year.

Speaker #2: Net income attributable to Vipshop shareholders was RMB 7.2 billion, compared with RMB 7.7 billion in the prior year. Net margin attributable to Vipshop shareholders was 6.8%.

Speaker #2: Compared with 7.1% in the prior year. Net income attributable to Vipshop shareholders per diluted ADS was RMB 14.15, compared with RMB 14.35 in the prior year.

Mark Wang: Net income attributable to Vipshop shareholders per diluted ADS was RMB 14.15, compared with RMB 14.35 in the prior year. Non-GAAP net income attributable to Vipshop shareholders was RMB 8.7 billion, compared with RMB 9.0 billion in the prior year. Non-GAAP net margin attributable to Vipshop shareholders was 8.3%, which remains stable as compared with that in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 17.08, compared with RMB 16.75 in the prior year. Looking forward to Q1 2026, we expect our total net revenues to be between RMB 26.3 billion and 27.6 billion, representing a year-over-year increase of approximately 0% to 5%.

Speaker #2: Non-GAAP net income attributable to Vipshop shareholders was RMB 8.7 billion, compared with RMB 9.0 billion in the prior year. Non-GAAP net margin attributable to Vipshop shareholders was 8.3%.

Speaker #2: Which remained stable as compared with that in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 17.08.

Speaker #2: Compared with RMB 16.75 billion in the prior year. Looking forward to the first quarter of 2026, we expect our total net revenues to be between RMB 26.3 billion.

Speaker #2: And R&B $27.6 billion, representing a year-over-year increase of approximately 0% to 5%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions.

Mark Wang: Please note that this forecast reflects our current and the preliminary view of the market and operational conditions, which is subject to change. With that, I would now like to open the floor to Q&A.

Speaker #2: Which is subject to change. With that, I would now like to open the poll to Q&A. Thank you. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced.

Operator: Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced.

Speaker #2: To withdraw your question, please press star 1 and 1 again. We kindly ask Annelise to translate the question into Chinese if they are bilingual.

Jessie Fan: To withdraw your question, please press star one and one again. We kindly ask analysts to translate their question into Chinese if they are bilingual. Once again, to ask a question, please press star one and one. We will now take the first question. Coming from the line of Ronald Keung from Goldman Sachs. Please go ahead.

Speaker #2: Once again, to ask a question, please press star, one, and one. We will now take the first question, coming from the line of Ronald Kung from Goldman Sachs. Please go ahead.

Ronald Keung: Hey, thank you, Mark, Thomas Chong. First, I want to ask about the seasonality of this Spring Festival. Because we saw that our Q1 guidance still has a certain increase. I want to hear, how do we think the market has been from the beginning of the year until now? Did the factor of this Spring Festival time point affect the ratio of our business that we see? It went up a little bit. Secondly, I just want to ask about how we should think about our margin for 2026. I think, basically in 2025, profits decreased. In terms of our thinking about our gross profit and costs for 2026, do you think the profit margin will probably stabilize, or are there any new investment points?

Speaker #3: Hey, this is Zheng, Mark.

Ronald Keung: How should we think about this expected profit for 2026? Thank you.

Speaker #4: 那个叫他用中英文吗?

[Company Representative] (Vipshop Holdings): Does he want it in English?

Jessie Fan: Hi, Ronald, would you please translate your question into English, please? Maybe I'll just translate the question first, and then let Eric respond to the question. The first question is about the quarter to date business performance, whether the seasonality is, especially a late spring festival, has impacted the business performance, and have we seen any recovery in the business based on the guidance? It seems like we are accelerating revenue growth a little bit. The second question is about the margin outlook for 2026. Because we have seen that margins for 2025 seem to be under a little bit pressure in terms of GP margin and then MP margin.

Speaker #2: Hi, Ronald. Would you please translate your question into English, please? So maybe I'll just translate the question first and then let Eric respond to the question.

Speaker #2: So the first question is about the quarter-to-date business performance. Whether the seasonality, especially the late Spring Festival, has impacted the business performance and have we seen any recovery in the business based on the guidance.

Speaker #2: It seems like we are accelerating revenue growth a little bit. The second question is about the margin outlook for 2026, because we have seen that margins for 2025 seem to be under a little bit of pressure in terms of GP margin and MP margin.

Jessie Fan: Whether we have new investments for 2026, and how do we think about a gross margin, cost and expenses and MP margin, or whether we can stabilize our margin profile?

Speaker #2: Whether we have new investments for 2026 and how do we think about gross margin cost and expenses and MP margin. Whether we can stabilize our margin profile.

Jessie Fan: Whether we have new investments for 2026, and how do we think about a gross margin, cost and expenses and MP margin, or whether we can stabilize our margin profile?

Speaker #4: 那个我回答第一个问题就是关于那个对Q1的预估。那么我们其实在去年的Q4碰到了暖冬的问题。可能行业里行业内确实去年的这个冬天。那么因为天气的原因其实衣服卖的确实不好。那么大家那个对衣服的购物欲望比较弱。那么我们说在今年的Q1我们看到整体情况有好转。那么包括那个虽然说我们现在春节的时候有时间错位的问题。那么我们比如说如果看一到二月相加。那么总体我们看到增长还是不错的。所以说我们其实对今年还是有信心关于对Q1我们也给了0到5的增长的预期。所以我们自己认为整体还不错。那么第二点就是问关于利润的净利率的问题。我们自己因为我们知道我们可能就是。在目前这种情况下我们其实要做稳健经营。所以说我们其实管理层对我们自己26年的预估我们认为我们的净利率还是要保持。那么最起码保持去年的水平甚至要做得更好一些。

[Company Representative] (Vipshop Holdings): I will answer the first question, which is about the forecast for Q1. We actually encountered the problem of warm winter in last year's Q4. Maybe within the industry, last year's winter, because of the weather, actually clothes did not sell well. Everyone's desire to buy clothes was weaker. We say that in this year's Q1, we have seen an improvement in the overall situation. Including that, although we now have the problem of misaligned time during the Spring Festival, for example, if we look at 1 January to February together, the overall growth is still good. We are actually confident about this year. Regarding Q1, we also gave a growth forecast of 0 to 5, we think the overall situation is not bad. The second point is about the profit margin.

[Company Representative] (Vipshop Holdings): We know that in the current situation, we actually need to operate steadily. Our management team's forecast for 2026, we think our profit margin still needs to be maintained, at least at last year's level, or even do better.

Speaker #2: Okay, so on the first question regarding the Q1 guidance, let's take a look at Q4 first. I think our online sales actually took a hit in Q4, especially in December.

Jessie Fan: Okay. On the first question regarding the Q1 guidance, let's take a look at the Q4 first. I think our online sales actually took a hit in Q4, especially in December. It was way too warm in China in most regions for people to buy winter clothes. Since the Chinese New Year is late this year, nobody was actually in a rush to shop for the holiday. Because of that, apparel didn't sell nearly as well as our other categories. As we head into the first quarter, the Q1, actually, we have seen consumer activity has clearly picked up, largely driven by New Year shopping.

Speaker #2: It was way too warm in China in most regions for people to buy winter clothes, and since Chinese New Year is late this year, nobody was actually in a rush to shop for the holiday.

Speaker #2: Because of that, apparel didn't sell nearly as well as our other categories. But as we are heading into the first quarter, Q1, actually we have seen consumer activity clearly pick up, largely driven by New Year shopping. And if we look at January and February combined, actually we do see a nice recovery in our core business.

Jessie Fan: If we look at January and February combined, actually, we did see a nice recovery in our core business. This has kept us firm on track with our guidance of 0% to 5% top line growth. We are confident that we can deliver that growth and for Q1 and for the rest of the year. Second, on margins, I think our business philosophy has been very consistent. We remain focused on high quality growth.

Speaker #2: So this has kept us firm on track with our guidance of zero to five percent top line growth and we are confident that we can deliver that growth and for Q1 and for the rest of the year.

Speaker #2: Second, on margins, I think our business philosophy has been very consistent. We remain focused on high-quality growth. We have had sustainable, profitable growth for the business, especially in a dynamic macro environment today.

[Company Representative] (Vipshop Holdings): sustainable, profitable growth for the business, especially in a dynamic macro environment today. We expect margins, you know, will be stable, and we will to make every effort to, you know, outperform in terms of margins for 2026 and beyond.

Speaker #2: So we expect margins will be stable, and we will make every effort to outperform in terms of margins for 2026 and beyond.

Ronald Keung: 谢谢。

Speaker #5: Thank you. Once again, to ask a question, please press star one and one. We'll remind analysts to ask their question in Chinese and English if possible.

Operator: Thank you. Once again, to ask a question, please press star 1 and 1. We remind analysts to ask their question in Chinese and English if possible. Our next question comes from the line of Alicia Yap from Citigroup. Please go ahead.

Speaker #5: Our next question comes from the line of Alicia Japp from Citigroup. Please go ahead.

Alicia Yap: Um, hello, um, good evening, um, thank you。 uh, 管理层晚上好，谢谢接受我的提问。呃，我有两个问题，我先用中文问吧。嗯，第一个问题是关于这个，呃，用户的这个增长，我记得，呃，之前管理层其实有，呃，就是曾经表示过，就是那个我们希望看到用户，呃，回，呃，回去，这个，这，这个增长的趋势是可以持续的，啊，但不知道说我们管理层对二六年用户增长有什么预期吗？然后对于整个，呃，用户需求的话呢，我们是怎么看待这个服 - 服装跟，呃，这个非标品这边的这个需求？然后第二个问题呢，我是想问，呃，关于 AI 的。呃，不知道我 - 我这个想法对不对啊，就是说，呃，完全是否，呃，认为，比如说我们唯品会，呃，这个尾货的这个服饰，服饰其实是，呃，比较能够抵制这个 AI 的冲击啊，因为，呃，感觉上就是，呃，就，就款式很多嘛，然后感觉上 AI 是比较不容易取代的，这个从一个 agent 这个 commerce，这个 booking 的情况下，然后也不知道说我们会不会，呃，就是投入更多的这个资源去线下，啊，比如说像三三，啊，out-out-outlet 这个这一块。好，我这边自己翻译一下。Um, so thanks for taking my questions.

Speaker #6: Hello, good evening. Thank you. Wang Yicheng,晚上好。谢谢接受我的提问。我有两个问题我先用中文问吧。第一个问题是关于这个用户的这个增长我记得之前管理层其实有就是曾经表示过就是那个我们希望看到用户回去这个增长的趋势是可以持续的。但不知道说我们管理层对26年用户增长有什么预期吗？然后对于整个用户需求的话呢我们是怎么看待这个服装跟这个非标品这边的这个需求？然后第二个问题呢我是想问关于AI的。我不知道我这个想法对不对就是说完全是否认为比如说我们唯品会这个尾货的这个服饰其实是比较能够抵制这个AI的冲击，因为感觉上就是款式很多嘛，然后感觉上AI是比较不容易取代的这个从一个agentic这个commerce这个booking的情况下。然后也不知道说我们会不会就是投入更多的这个资源去线下比如说像三三outlet这块。我这边自己翻译一下。So thanks for taking my questions, I have two questions. First is that related to the user growth. I think management previously comment that we are hopeful to see the user growth momentum to sustain.

Alicia Yap: I have two questions. First is that, related to the user growth. I think management previously comments that, you know, we are hopeful to see the user growth momentum to sustain. Just wondering if management could share with us, what is your expectation for the user growth for 2026? Regarding the demand, how are you seeing the demand for the apparels versus the non-apparel growth? Second question is related to AI. Just wondering, does management believe, you know, the overstocked, you know, business model that we have for Vipshop, would that be actually more resilient, you know, against this Agentic commerce? With that, will Vipshop actually invest more resources into growing the offline business such as the Shanshan Outlets? Thank you.

Speaker #6: So just wondering if management could share with us what is your expectation for the user growth for 2026? And then regarding the demand, how are you seeing the demand for the apparel versus the non-apparel growth?

Speaker #6: And second question is related to AI. Just wondering, does management believe the overstocked business model that we have for Vipshop would actually be more resilient against these agentic commerce?

Speaker #6: And with that, will VIP actually invest more resources into growing the offline business, such as the Sunshine Outlet? Thank you.

Speaker #4: 我来先回答第一个问题就是我们自己对用户增长是非常关注的，因为是有用户增长才会有业绩增长。那么我们原先预计比如说Q4的用户是正增长，但是确实也是因为Q4的这个购物需求急剧下降，所以导致用户增长也不如预期。但是我们希望到了26年那么我们会走到一个正常的轨道。那么我们相信在26年我们也要做到用户是正增长，而且增长还要越来越多越来越好。那这样才对我们的销售业绩有保证。那么因为比如说我们现在尤其是每年的退居率也会增加，所以其实用户的增长还要更高于我们的业绩增长。那么才会有确保我们的那个每年的那个财报的业绩有正增长。那么另外对整体的用户的购买趋势，那么包括整体现在的消费情况，那么用户确实是认为很有价值才买，所以说也更激发我们说要给用户创造价值。如果是做服装做折扣服装，那么让用户觉得他真的是超值，那么另外在标品方面我们也要做些改进，因为我们今年也调整了一些标品的政策，我们也希望那个用户来到我们唯品会这里也能买到一些比较好的标品。那么所以说我们总体货品的调整政策的调整也就是为了促进用户来买的更多，粘性更强。那么有一个长期健康的用户增长。那么第二点就是回答关于那个AI的问题。AI我们自己认为现在AI确实风起云涌，那么未来我们自己认为可能购物的入口包括那个AI的推荐其实会对电商有一些影响，但需要点时间。那么但是我们自己也认为不管AI怎么样吧，就是说如果我们在货品方面我们牢牢能把握住这种库存这种多样性低折扣的有价值的货品，那么就是说我们也不会掉对掉的太厉害。那么另外就是线上其实还是持续在卷嘛，那么我们自己认为比如说像三三outlet，那么像这种实体的门店，那么包括有用户体验用户的购物时间在的，像这种确实能抵御AI的那个入侵。那么包括我们其实在未来也要把三三outlet可能要做的更大。那么包括门店有健康的增长，那么而且销售要做的更强，那么我们说的覆盖更多城市，那么所以说这是我们对三三outlet未来的发展的想法。

[Company Representative] (Vipshop Holdings): 好，我来先回答第一个问题，就是我们自己对，呃，用户增长是非常关注的，因为是有用户增长才会有业绩增长。那么我们原先预计，譬如说 Q4 的用户是正增长，但是确实也是因为 Q4 的这个购物需求急剧下降，所以导致用户增长也不如预期。但是呢，我们想希望到了二六年，那么我们会走到一个正常的轨道，那么我们相信在二六年我们也要做到用户是正增长，而且呢，增长还要越来越多，越来越好，那这样才对我们的销售业绩有保证。那么因为譬如说我们现在，尤其是每年的退剧率也会增加，所以其实用户的增长还要更高于我们的业绩增长，那么才会有确保我们的那个每年的那个财报的业绩有正增长。那么另外呢，对整体的用户的购买趋势，那么包括整体现在的消费情况，那么用户确实是认为很有价值才买，所以说也更激发我们说要给用户创造价值。如果是做服装，做折扣服装，那么让用户觉得它真的是超值。那么另外呢，在标品方面我们也要做一些改进，因为我们今年也调整了一些标品的政策，我们也希望，呃，那个用户来到我们唯品会这里也能买到一些比较好的标品。那么所以说我们总体货品的调整，政策的调整，也就是为了促进用户买，来买得更多，黏性更强，那么有，有一个长期健康的用户增长。那么第二点就是回答关于那个 AI 的问题。AI 呢，我们自己认为现在 AI 确实风起云涌，那么未来我们自己认为可能购物的入口啊，包括那个 AI 的推荐啊，其实会对电商有一些影响，但需要点时间。那么但是我们自己也认为，不管 AI 怎么样吧，就是说如果我们在货品方面，我们牢牢能把握住这种库存，这种多样性，低折扣的有价值的货品，那么就是说我们也不会掉队掉得太厉害。那么另外呢，就是线上其实还是持续在卷嘛，那么我们自己认为，譬如说像三三奥莱，那么像这种实体的 ......

[Company Representative] (Vipshop Holdings): 門店。包括有用戶體驗，用戶的購物時間在的，像這種確實能抵禦 AI 的那個入侵。包括我們其實在未來也要把 Shanshan Outlets 可能要做得更大。包括門店有健康的增長。而且銷售要做得更強。我們說的，覆蓋更多城市。這是我們對 Shanshan Outlets 未來的發展的想法。

Jessie Fan: On the first question about customer growth. Customer growth is definitely our top priority. That's actually the foundation for sales growth and ultimately profitability. In Q4, we had thought we should have maintained the customer growth momentum, but due to a slow, unexpected slowdown in consumer activity, actually customer growth is a little bit under pressure. We expect customer to regrow for 2026, ideally we should see customer growth is actually faster than sales growth to offset the impact of a slightly rising return rate. We are definitely going to make every effort to bring customer back to growth track in 2026.

Speaker #3: So on the first question about customer growth, customer growth is definitely our top priority. That's actually the foundation for sales growth and ultimately profitability.

Speaker #3: In Q4, we had thought we should have maintained the customer growth momentum, but due to an unexpected slowdown in consumer activity, actually customer growth is a little bit under pressure.

Speaker #3: We expect customers to regrow for 2026, and ideally, we should see customer growth is actually faster than sales growth, to offset the impact of a slightly rising return rate.

Speaker #3: So, we are definitely going to make every effort to bring the customer back to the growth track in 2026. On the second question regarding category preferences, consumers are still, generally speaking, cautious and selective, and value-conscious.

Jessie Fan: On the second question regarding category preferences, consumers are still generally speaking, still cautious and selective, and value conscious. They continue to shop across different categories, including discretionary categories. They just need strong reasons to do so. That's why we focus so much on providing the best value across the shopping carts, including apparel and non-apparel categories. We are making changes in both categories, especially in standard categories, to drive repeat business for our most valuable customers, including as SVIP and high-value customers, to increase their cross-category purchases for family shopping. Lastly, on AI. Definitely AI is fundamentally transforming many industries, including the e-commerce industry.

Speaker #3: But they continue to shop across different categories, including discretionary categories. They just need strong reasons to do so, so that's why we focus so much on providing the best value across the shopping cart.

Speaker #3: Including apparel and non-apparel categories, we are making changes in both categories, especially in standard categories. This is to drive repeat business for our most valuable customers, including our VIP and high-value customers.

Speaker #3: To increase their cross-category purchases for family shopping. Lastly, on AI—definitely, AI is fundamentally transforming many industries, including the e-commerce industry. And for an off-price retailer like Vipshop, we are definitely adapting to this trend to remain competitive.

Jessie Fan: For an off-price retailer like Vipshop, we are definitely adapting to this trend to remain competitive. We believe fundamentally our business model relies on merchandising, on how well we can secure quality, deep discount inventory, how well we can provide a best value for customers. We think as long as we make a difference in merchandising and supply chain liability, we will not be left behind. Of course, the online business is a hyper-competitive business. That's why we are constantly looking for opportunities offline, especially with the outlet business, which proves to be a very good business model in terms of revenue, stable revenue streams and profitability.

Speaker #3: We believe fundamentally our business model relies on merchandising on how well we can secure quality deep discount inventory how well we can provide a best value for customers.

Speaker #3: We think as long as we make a difference in merchandising and supply chain, our liability, we will not be left behind. Of course, the online business is a hyper-competitive business.

Speaker #3: That's why we are constantly looking for opportunities offline, especially with the outlet business, which proves to be a very good business model in terms of stable revenue streams and profitability.

Jessie Fan: We are actually expanding our presence for Shanshan Outlets, which are doing great in terms of sales and profit contribution. We expect a measured pace of expansion into more cities and regions and geographies. We expect to see continued strong growth in terms of sales, revenue, and profit from Shanshan business. We expect with a strong offline presence, we will be able to offset any potential challenge from AI. Thank you.

Speaker #3: So, we are actually expanding our presence for the Shenzhen outlet, which is doing great in terms of sales and profit contribution. And we expect a measured pace of expansion into more cities and regions and geographies. We expect to see continued strong growth in terms of sales revenue and profit from the Shenzhen business.

Speaker #3: And we expect, with strong offline, we will be able to offset any potential challenge from AI.

Speaker #1: Thank you. There are no further questions at this time. At this time, I would like to turn the conference back to Jessie for any closing remarks.

Operator: Thank you. There are no further questions at this time. At this time, I would like to turn the conference back to Jesse for any closing remarks.

Speaker #3: Thank you for taking time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter.

Jessie Fan: Thank you for taking time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter.

Operator: This concludes today's conference call. Thank You for participating. You may now disconnect.

Q4 2025 Vipshop Holdings Ltd Earnings Call

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