Chinese online retail giant JD.com on Wednesday (March 6) reported better-than-expected fourth-quarter sales, with aggressive price cuts boosting demand from consumers struggling in an uncertain economy. As it contributed to the recovery, it expanded its stock repurchase program.
The company's U.S.-listed shares rose 9.4% in premarket trading.
China's unstable economic growth, high youth unemployment and declining wages for office workers have caused consumers to tighten their wallets and retailers such as Jingdong Mall to offer deep discounts to support sales. ing.
The company reported quarterly net sales of 306.1 billion yuan (US$42.52 billion), compared to analysts' average estimate of 300.04 billion yuan, according to LSEG data.
Some analysts believe JD.com's popularity among cost-conscious buyers increased this quarter.
Analysts also allayed investors' concerns, saying the “suspicious activity” uncovered by an internal audit of the Dada Nexus unit was unlikely to have had a material impact on the company's overall revenue.
JD.com announced that it will repurchase up to US$3 billion worth of its own shares, including American Depositary Receipts, over the next 36 months through March 2027.
The company reported net profit attributable to shareholders of 3.4 billion yuan, an increase of more than 13% from 3 billion yuan in the same period last year.
