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Dangdang issues Q3 warning, shares -8.7% AH

  • Dangdang (DANG) expects Q3 revenue of RMB1.52B-1.53B ($249.6M-$251.2M), below prior guidance of RMB1.584B ($260.1M) and a consensus of $261.5M. (PR)
  • The Chinese e-commerce attributes the cut to a "decision to reduce sales of certain lower margin products," as it continues transitioning from being an online bookseller to "an integrated online shopping mall targeting mid- to high-end customers."
  • One silver lining: As a result of Dangdang's decision, gross margin is expected to be in a range of 17.5%-17.7%, up from Q2's 17.1% and the year-ago period's 15.2%. Net loss is expected to decline to RMB27M-29M from 63.9M in Q2 and 100.1M a year ago.
  • Shares closed today not far removed from their 52-week high, in spite of falling in August in the wake of Dangdang's Q2 report.
Comments (1)
  • Xavier M
    , contributor
    Comments (50) | Send Message
     
    Seems like very good news. Company likely to be profitable in 1Q2014, much much earlier than analysts expected, margins improving nicely and losses being reduced big time. Reducing worthless revenue for better margin sales seems like a good long term strategy.

     

    Meanwhile as volume increases, next year Dang will be able to negotiate higher commissions with its third party merchants which have become the central part of it's revenue and its delivery companies will cost less money.
    22 Oct 2013, 03:46 AM Reply Like
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