Many investors remain worried about the health of China’s economy. But it looks like the Chinese are still shopping until they drop. The country’s e-commerce giant Alibaba reported a huge jump in sales that topped Wall Street’s forecasts.
Alibaba said on Thursday that revenue for its fiscal second quarter surged nearly 60% from a year ago to $4.84 billion, easily surpassing analysts’ estimates for sales of $4.54 billion.
Mobile revenue more than doubled. Alibaba now has 427 million mobile monthly active users, an increase of almost 40% from last year.
Alibaba chief financial officer Maggie Wu said the company’s sales growth was the highest since the company went public in September 2014. And she added that this was the first time Alibaba made more money from mobile users than desktop users.
The company also reported a net profit, after backing out some one-time items, of $1.8 billion … or 73 cents a share. That was up 33% from the same period last year and also was higher than what Wall Street analysts were expecting.
Alibaba (BABA, Tech30) stock was up more than 4% in early trading on the news. Alibaba’s solid report comes a day after one of its top rivals, JD.co, (JD)also pleased Wall Street with strong sales growth.
This appears to be a sign that concerns about China’s middle class pulling back may be for naught. It may also show that Alibaba is finally doing a better job of combating the plague of counterfeit goods that are often found on Alibaba’s sites.
And it’s in stark contrast to what’s going on in the United States, where many big retailers are warning of weak sales in the next few months.
Of course, the success of Amazon (AMZN, Tech30) is one big reason why U.S. retailers are in trouble. And in many respects, Alibaba is China’s Amazon.
Alibaba posts huge jump in sales, blows away Wall Street’s forecasts
August 12, 2016 by Leave a Comment