Requested updates on Shanshan's Q1 performance and the financial impact of the Vipshop commercial REIT.

Shanshan Outlet GMV grew around 30% YoY in Q1. The commercial REIT obtained approval, and Vipshop subscribed for 49% of shares. This will result in deconsolidation, a one-time GAAP investment gain of RMB 5.3 billion (net of RMB 1.7 billion income tax) and a net cash inflow of RMB 1.7 billion in Q2. “Shenzhen Outlet business is quite strong in the first quarter, and the GMV growth around 30% year-over-year. ... on a GAAP basis, we will book a onetime investment gain of around RMB 5.3 billion in the second quarter, an increase of RMB 1.7 billion income tax. And cash flow-wise, we will see a significant increase in net cash inflow of RMB 1.7 billion in the second quarter.”

Asked why Vipshop's online sales are negative while NBS apparel sales grew 3.6% in April, and if Shanshan's strong growth indicates a shift to offline or unique merchandise.

NBS data includes both online and offline; Vipshop noted a 'notable decline' in online sales, consistent with industry. Offline growth is strong, partly due to holiday-driven activity and concentration in sportswear/outdoor. Online sales are impacted by higher return rates. Discretionary apparel (women's/men's wear) shows real weakness. “Based on our observation, actually online, we have noted -- we have seen a very notable decline -- and we are actually quite in line with the industry trend. And off-line, we do see very strong growth.”

Inquired about the widening gap between GMV and revenue, and how recent soft trends impact H2 expectations.

The GMV-revenue gap widened due to slightly increased return rates (higher apparel/SVIP contribution) and increased GMV contribution from Shanshan Outlets (commission-based, net revenue recognition). Despite near-term softness, the full-year target is still achievable, aiming for steady business performance. “the year-over-year growth gap between revenue and GMV in the first quarter increased due to the following 2 reasons: the first 1 is return exchange rate slightly increased year-over-year due to higher contribution from apparel categories and SVIP members. And secondly, just you mentioned the increased GMV contribution from financial outlets given the extension operates on a commission-based model.”

VIPS

Vipshop (VIPS) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Discretionary· May 21, 2026

Source: earnings call transcript

Executive summary

Vipshop Q1 FY26 — Strong SVIP Growth and Strategic AI Integration Offset Near-Term Demand Softness

Vipshop's Q1 FY26 performance was marked by a calendar-driven shift, pulling demand forward into the Chinese New Year period, followed by softness in March and into Q2. Despite near-term revenue deceleration and a cautious Q2 outlook, the company demonstrated strong SVIP member growth and margin expansion. Strategic investments in AI and merchandising optimization are underway to drive long-term profitable growth, while a significant one-time gain is expected from the Shanshan Outlet REIT.

Highlights

SVIP members grew by 9% year-over-year, accounting for 55% of online spending.
Gross profit increased by 6.8% year-over-year to RMB 6.5 billion.
Gross margin expanded to 24.4% from 23.2% in the prior year period.
Income from operations increased by 9.7% year-over-year to RMB 2.5 billion.
Shanshan Outlet GMV grew around 30% year-over-year in Q1.

Concerns

Total net revenues increased only 1.2% year-over-year to RMB 26.6 billion, below expectations due to calendar shift and demand moderation.
Q2 FY26 revenue guidance is between RMB 24.5 billion and RMB 25.8 billion, representing a year-over-year decrease of approximately 5% to 0%.
April data 'does not turn out very well,' and May is 'still very challenging' for sales.
Online sales noted a 'very notable decline' in April and May, in line with industry trends.

Guidance & targets

Category	Target	Timeline	Confidence
Total Net Revenues	RMB 24.5 billion and RMB 25.8 billion high materiality	Q2 · FY26	High
Shareholder Return Commitment	no less than 75% of full year 2025 non-GAAP net income medium materiality	Full Year 2026 · FY26	High
Full Year Outlook	maintain steady outlook high materiality	Full Year 2026 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Shanshan Outlets The Shanshan Outlet business was quite strong in the first quarter. Two of its material assets, Zhengzhou and Harbin outlets, are now part of a commercial REIT, with Vipshop subscribing for 49% of the shares. GMV growth: ~30% YoY	—	—	—	—

Deals & partnerships

Vipshop Commercial REIT Formation of a commercial REIT with two underlying assets (Zhengzhou and Harbin outlets). Vipshop subscribed for 49% of the total shares. One-time GAAP investment gain of RMB 5.3 billion (net of RMB 1.7 billion income tax); Net cash inflow of RMB 1.7 billion

The commercial REIT obtained official approval from the CSRC and Shanghai Stock Exchange in late April and completed the pricing process on May 19. The REIT features more flexible policy regarding fund usage and expansion mechanism. Vipshop also holds another 18 projects demonstrating strong potential for future expansion.

Risks & headwinds

Calendar-driven shift in demand Q1 FY26

Strong holiday surge in January-February pulled forward demand, resulting in soft March sales.

Mitigation:Optimized merchandising and customer engagement to capture peak demand during the holiday season.

Soft consumer sentiment and activity Q2 FY26

April sales data 'does not turn out very well,' and May is 'still very challenging.' Online sales noted a 'very notable decline.'

Mitigation:Continuously optimizing operational strategies, focusing on high-quality profitable revenue, and systematically strengthening foundations for the long term.

Low visibility on consumer sentiment and activity for Q2 Q2 FY26

Q2 FY26 revenue guidance is a year-over-year decrease of 5% to 0%.

Mitigation:Prudent and conservative guidance provided to reset expectations.

Weakness in discretionary apparel categories (women's and men's wear) April and May

Noted as 'real weakness' in April and May, contrasting with outperformance in sportswear and outdoor products.

Mitigation:Need more time to observe if discretionary spending improves; focus on optimizing merchandising and value propositions.

Increased return exchange rate Q1 FY26

Slightly increased year-over-year.

Mitigation:Attributed to higher contribution from apparel categories and SVIP members, implying it's a mix effect rather than a problem to mitigate.

What to watch in Q2 FY26

Q2 FY26 Revenue Performance

Next quarter (Q2 FY26 results)

Current Q2 FY26 guidance: -5% to 0% YoY decrease (RMB 24.5B - RMB 25.8B)

Target Performance within or above the guided range

Why it matters

Indicates whether the recent demand softness and conservative outlook were accurate or if conditions improved/worsened.

Looking forward to the second quarter of 2026, we expect our total net revenues to be between RMB 24.5 billion and RMB 25.8 billion, representing a year-over-year decrease of approximately 5% to 10% to 0%.

Find out whether VIPS delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about recent GMV trends given industry softness, expectations for the 618 promotion, and the consumer sentiment outlook for the second half.

Management noted a strong Jan-Feb due to CNY, followed by softness in March, April, and challenging May. They have low visibility for Q2, leading to conservative guidance. For H2, they believe opportunities exist, especially in apparel, and aim for steady operational performance, maintaining the full-year outlook.

“So following the holiday period, we saw a very apparent moderation of sales in March and as we enter the second quarter, the April data does not turn out very well, slightly it's not improving from March and into May to date, still very challenging.”

asked by Thomas Chong · answered by Jessie Fan

3 min read 6 chapters

Detailed narrative

Calendar-Driven Demand Shift and Q2 Outlook

Vipshop's Q1 FY26 performance was significantly influenced by a later Chinese New Year, which pulled demand forward into January and February, leading to a strong holiday surge. This resulted in a soft March and continued challenging sales trends into April and May.

Management provided a conservative Q2 FY26 revenue guidance, expecting a year-over-year decrease of 5% to 0%, reflecting low visibility on consumer sentiment and activity. Despite near-term pressures, the company maintains its full-year outlook, believing opportunities exist in the second half, particularly in apparel.

SVIP Member Growth and Engagement Strategy

The company reported positive momentum in its customer base, with SVIP members growing by 9% year-over-year and now accounting for 55% of online spending. Vipshop is enhancing its SVIP program by shifting to a more targeted acquisition model, identifying members with high long-term value.

They are also implementing a tiered service system, rewarding higher spending with exclusive product access, deeper discounts, and personalized support, aiming to drive both member acquisition and loyalty.

Merchandising and AI Integration for Operational Impact

Vipshop is optimizing its merchandising portfolio, speeding up buying cycles, and evolving its 'made 4 VIP' line into 'Globe' with a focus on quality and value. The company is increasingly leveraging AI, initially for customer-facing enhancements like virtual try-ons and smart search.

Now, the focus is scaling AI for operational impact, including generative AI for personalized marketing to improve customer acquisition efficiency and providing brand partners with advanced business analytics and optimized merchandising strategies.

Shanshan Outlet REIT and Financial Impact

The Vipshop commercial REIT, comprising two material assets (Zhengzhou and Harbin outlets), obtained official approval and completed its pricing process in May. Vipshop subscribed for 49% of the total shares. This transaction will lead to the deconsolidation of these outlets from Vipshop's financials and is expected to result in a one-time GAAP investment gain of approximately RMB 5.3 billion in Q2 FY26, along with a net cash inflow of RMB 1.7 billion.

The company also holds 18 other outlet projects for potential future expansion.

Online vs. Offline Sales Trends and Category Performance

While China's NBS data showed a 3.6% growth in total apparel sales for April (online and offline combined), Vipshop observed a 'notable decline' in its online sales, consistent with broader industry trends. Conversely, offline outlets, including Shanshan, experienced strong growth.

This divergence is attributed to consumer shifts towards offline shopping, partly holiday-driven, and a higher concentration of sales in categories like sportswear and outdoor products in offline channels. Discretionary apparel categories, such as women's and men's wear, showed particular weakness online.

Shareholder Returns and Free Cash Flow

Vipshop remains committed to its 2026 shareholder return program, aiming to return no less than 75% of its full-year 2025 non-GAAP net income. In April, the company distributed approximately USD 300 million in annual dividends. Management highlighted a robust free cash flow outlook and sufficient financial capacity to meet its full-year allocation target, with plans to execute the remaining balance of the program in the quarters ahead.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.