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Vipshop Holdings Ltd. (VIPS) Stock on a Precipitous Rise in Premarket, Here’s Why

Vipshop Holdings Ltd. (VIPS), an online discount retailer for various brands, closed Wednesday’s regular trading session at $9.21 after declining 3.96% during the day. In the premarket trading session, VIPS stock has soared by 7.60% and consequently was trading at $9.91 at the last check. The eminent performance in premarket is attributed to the share repurchase program announcement.

Authorization of Share Repurchase Program

Hours ago, VIPS has announced that its Board of Directors has authorized the share repurchase program. Under the program, the company could repurchase $1 billion of the Class A ordinary shares over the next 24 months. The company said that it intends to adopt the program under the applicable rules of the Securities Exchange Act of 1934.

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Q4 & FY 2021 Results

On the 23rd of February, VIPS released the financial results for Q4 & FY 2021. The total revenue for Q4 2021 stood at $5.4 billion. The gross profit for the quarter was calculated to be $1.1 billion, while the operating expenses were $780.4 million. The net income generated from the company during Q4 2021 was $222 million (or $0.32 per share). For the full year of 2021, the total net revenue was $18.4 billion. The gross profit for the fiscal year was $3.6 billion, while the net income was calculated to be $734.6 million.

Comments from VIPS CEO

Eric Shen, Chairman and Chief Executive Officer of VIPS, commented that the company is pleased with its business performance throughout the year 2021 despite the challenging circumstances it had to endure. The company remained focused on its core brands, and as a result, increased the business synergies that reinforced its values proposition as a leading retailer for the brands.

What’s Ahead for VIPS?

Looking ahead, analysts believe that despite short term positive signals, VIPS shouldn’t be considered a buy candidate. At the current level, the investors should take it as a hold candidate while waiting for upcoming developments.

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