NEW YORK - With sales growth slowing in China, Alibaba (
NYSE:BABA,
Forum) is looking across its borders to give sales a boost.
The Chinese e-commerce powerhouse reported first-quarter net income more than doubled on strong growth across its online and mobile platforms.
Though revenue jumped 28 per cent, the growth fell short of Wall Street expectations and shares fell 6 per cent in early trading.
Conlumino analyst Neil Saunders pointed out that revenue growth over the past fiscal year was 39 per cent, and it reached 59 per cent the year before that.
“This is not to infer criticism of Alibaba, but it does suggest that its core Chinese business has now reached a level of maturity that will dampen future growth rates,” Saunders wrote.
Alibaba went public in the U.S. in September and investors, seeking to tap into the rapidly growing Chinese middle-class, scrambled to buy shares. Alibaba's e-commerce platforms, including Taobao and Tmall, make up 80 per cent of Chinese e-commerce.
But China's growth has slowed and Beijing devalued the yuan this week to calm domestic markets that have become extremely volatile. But that roiled global markets and the Hang Seng index tumbled 2.4 per cent Wednesday. The index has slid 13 per cent over the past three months.
Alibaba has begun looking abroad to spur sales, both from U.S. companies selling goods on its platforms in China and Chinese sellers reaching international customers.
“In recent months, we have made substantial progress in providing international access to Chinese consumers shopping on marketplaces,” said CEO Daniel Zhang in a call with analysts. “More and more brands believe our Tmall platform is the only e-commerce channel to develop their China business.”
The company said Wednesday that Macy's (
NYSE:M,
Forum) will launch a store on Alibaba's Tmall Global platform later this year.
Other U.S. retailers on Tmall Global include Costco (
NASDAQ:COST,
Forum), Juicy Couture, Gap (
NYSE:GPS,
Forum), Vitamin Shoppe (
NYSE:VSI,
Forum), Nature's Bounty, Mead Johnson (
NYSE:MJN,
Forum) and Thermos.
First-quarter net income rose to 12.34 million Chinese yuan, or 11.92 yuan ($1.92) per share. Excluding one-time items, net income was 59 cents per share. That beat analyst expectations of 56 cents per share according to FactSet.
Annual active buyers rose 32 per cent to 367 million.
Revenue rose 28 per cent to 20.25 million Chinese yuan ($3.27 billion), from 15.77 billion Chinese yuan a year ago. That missed analyst expectations of $3.32 billion.
Sales on mobile devices made up more than half of Alibaba's retail total for the first time.
Revenue from cloud computing more than doubled to 485 million Chinese yuan ($78 million).
Alibaba, based in Hangzhou, China, also announced a $4 billion share repurchase program over the next two years.
Shares fell $5.02 to $72.32 in morning trading, hitting the lowest level since the company went public in September.