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Vipshop (VIPS) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Consumer Discretionary· Feb 26, 2026

Source: earnings call transcript

Executive summary

Vipshop Q4 FY25 — Resilient Profitability Amidst Dynamic Market

Vipshop navigated a dynamic 2025 with strategic realignment and operational resilience, delivering robust profitability despite a slight top-line deceleration in Q4 due to seasonal factors. The company remains committed to high-quality, sustainable growth, leveraging its off-price model, AI integration, and Super VIP program to enhance customer engagement and operational efficiency. Management expects stable margins and renewed customer growth in 2026, supported by offline expansion.

Highlights

5

  • Full year 2025 non-GAAP net income attributable to shareholders was RMB 8.7 billion, with non-GAAP net margin stable at 8.3%.

  • Super VIP active members grew 11% to 9.8 million in 2025, contributing 52% of online spending.

  • Made for VIP line sales grew over 40% in 2025, accounting for 5% of online apparel sales.

  • Commitment to return $944 million to shareholders in 2025 through dividends and share repurchases.

  • Q4 2025 income from operations increased by 1.7% year-over-year to RMB 2.90 billion, with operating margin increasing to 8.9% from 8.6%.

Concerns

5

  • Q4 2025 net revenues were RMB 32.5 billion, slightly below expectations and down from RMB 33.2 billion in the prior year period, due to deceleration in December sales.

  • Gross margin for Q4 2025 was 22.9%, a slight decrease from 23.0% in the prior year period.

  • Full year 2025 total net revenues were RMB 105.9 billion, down from RMB 108.4 billion in the prior year.

  • Full year 2025 gross margin was 23.1%, down from 23.5% in the prior year.

  • Customer growth was under pressure in Q4 due to unexpected slowdown in consumer activity.

Guidance & targets

CategoryTargetConfidence
Total net revenues
between RMB 26.3 billion and RMB 27.6 billion
high materiality
High
Margin outlook
stable
high materiality
High
Capital returns
no less than 75% of full year 2025 non-GAAP net income attributable to Vipshop's shareholders
high materiality
High
Annual dividend
approximately USD 300 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Made for VIP line (within online apparel)
Became a key driver of differentiation, streamlining exclusive products to build clear identity and drive mind share.
% of online apparel sales: 5%
—over 40%——

Product announcements

ProductTypeDetails
AI virtual try-on featurelaunch

Deals & partnerships

Shan Shan Outlets Expansion of offline retail presence

Expanding presence into more cities and regions to offset potential challenges from AI and leverage a stable offline business model.

Risks & headwinds

Deceleration in December sales Q4 2025

Q4 2025 net revenues were RMB 32.5 billion compared with RMB 33.2 billion in the prior year period.

Mitigation:Focus on providing best value across shopping carts, refining synergies for cross-sell, and expanding offline presence.

Weak winter apparel demand Q4 2025

Online sales took a hit in Q4, especially in December, due to warm weather in China.

Mitigation:Proactively shaping a resilient assortment, focusing on value proposition, and expanding into related categories.

Delayed holiday shopping due to a later Spring Festival Q4 2025

Nobody was in a rush to shop for the holiday in Q4.

Mitigation:Not explicitly stated, but Q1 recovery noted.

Dynamic macro environment Ongoing

Consumers are still, generally speaking, still cautious and selective and value conscious.

Mitigation:Focused strategy and strong execution, commitment to sustainable profitability growth, off-price model resilience.

Hypercompetitive online business Ongoing

Not quantified.

Mitigation:Looking for opportunities offline with Shan Shan outlets, adapting to AI trends, focusing on merchandising and supply chain reliability.

Slightly rising return rate Current

Not quantified.

Mitigation:Aiming for customer growth to be faster than sales growth to offset this impact.

What to watch in Q1 FY26

User Growth Momentum

Next quarter (Q1 FY26) and 2026
Current Under pressure in Q4
Target Regrow for 2026, faster than sales growth

Why it matters

User growth is the foundation for sales growth and profitability, and is expected to offset rising return rates.

[Interpreted] 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 expected slowdown in consumer activity, actually, customer growth is a little bit under pressure. We expect customer to regrow for 2026. And we ideally, we should see customer growth is actually faster than sales growth to offset the impact of a slightly rising return rate.

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

Q&A highlights

Inquired about quarter-to-date business recovery after Q4 slowdown, especially with the late Spring Festival, and the sustainability of user growth. Also asked about the margin outlook for 2026, given 2025 pressure, and potential new investments.

Management confirmed Q4 slowdown due to warm weather and late holiday, but noted a clear pickup in consumer activity in Q1, especially January and February, supporting the 0-5% revenue guidance. They expect stable margins for 2026, aiming to outperform.

“[Interpreted] So, 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. And since Chinese New Year is late this year, nobody was actually in a rush to shop for the holiday. Because of that, apparel didn't nearly as well as our other categories. But as we head into the first quarter, Q1, actually, we do see a nice recovery in our core business.”

asked by Ronald Keung · answered by Eric Shen

2 min read 6 chapters

Detailed narrative

Strategic Reorganization and Merchandising

Vipshop implemented a strategic reorganization of its merchandising and customer engagement teams in 2025 to enhance agility and decision-making, breaking down internal silos. The merchandising strategy focused on three pillars: enhancing customer relevance, building differentiation, and deepening category expertise. This enabled the company to acquire more quality deep discount inventory and align supply with evolving customer demand, strengthening its branded product portfolio.

Made for VIP Line and Optimistic Buying

The 'Made for VIP' line emerged as a key differentiator, with sales growing over 40% in 2025 and contributing 5% of online apparel sales. Vipshop is streamlining these exclusive products to build a clear identity and convey high value. The company's optimistic buying approach secures a portfolio of high-demand, low-priced items from top global and domestic partners, combined with dynamic fresh sales, to drive customer excitement and repeat visits.

Customer Engagement and Super VIP Program

A unified team now manages the entire customer journey, from brand acquisition to lifelong engagement, utilizing enhanced capabilities for user targeting. The Super VIP program remains a cornerstone of growth, with active SVIP members increasing by 11% to 9.8 million in 2025, contributing 52% of online spending. SVIPs demonstrate significantly higher retention and repeat purchases, providing a reliable revenue stream and attracting brand partners.

AI Integration and Operational Efficiency

Vipshop is extensively deploying AI across its business to drive tangible value. Advanced AI applications in search, recommendations, customer service, and marketing have enhanced customer experience and empowered brand partners. AI-powered customer service automates routine interactions, with automated resolutions approaching 90%.

AI-generated content is used in marketing to reduce production costs and optimize customer acquisition, and the AI virtual try-on feature has proven effective in driving engagement and loyalty.

Offline Expansion with Shan Shan Outlets

Recognizing the hypercompetitive online business environment, Vipshop is expanding its offline presence through Shan Shan outlets. This business model has proven successful in terms of stable revenue streams and profitability. The company plans a mirrored pace of expansion into more cities and regions, expecting continued strong growth in sales, revenue, and profit from the Shan Shan business, which will help offset potential online challenges.

2025 Performance and 2026 Outlook

Vipshop concluded 2025 with resilient profitability despite a slight deceleration in Q4 sales, primarily due to weak winter apparel demand and delayed holiday shopping. For Q1 2026, the company forecasts total net revenues between RMB 26.3 billion and RMB 27.6 billion, representing 0% to 5% year-over-year growth, driven by a pickup in consumer activity.

Management expects margins to remain stable in 2026 and aims for customer growth to outpace sales growth.

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