Net Profit Plummets 92.69% YoY in 3Q 2020

Consumer Staples Author: Yue Liu Editor: Luke Sheehan Oct 31, 2020 04:00 PM (GMT+8)

The transformation of traditional retail is imminent.

Image credit: EqualOcean

On October 30, released the report for the third quarter of 2020, showing that in the first three quarters, revenue was CNY 180.86 billion, a year-on-year decrease of 10.02%; net profit attributable to shareholders of listed companies was CNY 547 million, a year-on-year decrease of 95.40%. The third-quarter revenue was CNY 62.44 billion, a year-on-year decrease of 4.58%; the net profit was CNY 714 million, a year-on-year decrease of 92.69%. The company stated that the sharp drop in net profit was that the investment income brought by Suning Xiaodian and Suning Financial Services during the same period last year was excluded from financial reports.

The online commodity transaction volume reached CNY 202.55 billion (tax included), increasing 18.15% year-on-year, accounting for 69% of the total scale. And, the proportion of non-electrical goods merchants increased to 89.46%.

In terms of store layout, Suning retail cloud opened 2,432 franchised stores and closed 674 direct-operated stores in the first three quarters. There are 2,697 self-operated stores of various types and 6,588 Suning Retail Cloud franchised stores. The sales volume of Retail Cloud has increased by 77.5% year-on-year.

In the first three quarters, the maternal and child specialty stores Redbaby opened 8 new stores and closed 38 stores; in the third quarter, it opened 5 new stores and closed 6 stores. From January to September 2020, comparable stores' sales revenue (referring to stores opened on or before January 1, 2019) decreased by 16.78% year-on-year.

In the first three quarters, 27 new home appliance 3C home life specialty stores opened and 241 closed. Among them, in the third quarter, 13 new stores opened and 28 closed. In the first three quarters, the offline retail sales revenue in comparable stores decreased by 28.81% year-on-year.

In the first three quarters, it opened 4 new Carrefour hypermarkets, one community fresh food store. Eight Su Xiansheng supermarkets were incorporated into Carrefour China for unified operation, and 11 Carrefour supermarkets closed. In the third quarter, three Carrefour hypermarkets opened, nine closed, and one new community fresh food store opened. Besides, Carrefour's home delivery business orders increased by 10% from the previous quarter.

In terms of logistics and warehousing network construction, five logistics bases were delivered and used, eight logistics bases were newly added or expanded. And, it delisted the logistics bases in eight cities including Nanjing, Suzhou, Xi'an and Kunming. As of September 2020, the company has 62 logistics bases in 46 cities, and 21 logistics bases are under construction and expansion in 18 cities. Also, home appliances logistics has developed rapidly, with its services cover 331 cities, of which the fourth- and sixth-tier markets account for 30%.