Temu Parent PDD Holdings Q4 2023: Higher Profit Despite Revenue Miss - Stock Price Insights
PDD Holdings, the parent company of the Temu shopping app, reported stronger quarterly profits in Q4 2023 despite revenue falling short of expectations due to changing consumer spending and rising costs.
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Essential Highlights
- PDD Holdings posted increased net income in Q4 2023 despite revenue growth lagging behind forecasts.
- Declining consumer spending in China and rising fulfillment plus payment processing costs pressured margins.
- Shares of PDD Holdings on U.S. exchanges climbed 1.7% following earnings but have declined approximately 3% over the last 12 months.
Shares of PDD Holdings (NASDAQ: PDD), the company behind the Temu e-commerce platform, rose modestly after releasing its Q4 2023 financial results. The firm reported a non-GAAP net income of 29.85 billion yuan (about $4.09 billion), surpassing analyst expectations. However, revenue for the quarter increased 24% year-over-year to 110.61 billion yuan, falling short of the anticipated 117.83 billion yuan estimated by Visible Alpha analysts.
The company faced a 36% surge in cost of revenue, reaching 47.80 billion yuan, driven primarily by increased fulfillment and payment processing expenses. Operating expenses also rose 19% to 37.22 billion yuan, reflecting investments aligned with their strategic growth initiatives.
Jun Liu, Vice President of Finance, emphasized that PDD Holdings "delivered stable financial results supported by the resolute execution of our high-quality development strategy," highlighting the company’s focus on sustainable growth.
Chinese retail sales growth slowed to 3.7% in December 2023, about half the rate seen the previous year, indicating cautious consumer behavior impacting overall sales.
Following the earnings release, PDD Holdings’ U.S.-listed shares gained 1.7% but remain down roughly 3% compared to the same period last year.
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