Categories Analysis, Retail, Technology
Alibaba (BABA) ends the fiscal year on a solid note despite a challenging environment
Annual active customers globally reached approx. 1.31 billion for the 12 months ended March 31, 2022
Shares of Alibaba Group Holding Ltd. (NYSE: BABA) gained 15% on Thursday following a strong earnings report from the company. The Chinese ecommerce giant delivered better-than-expected results for its fourth quarter of 2022 amid a challenging backdrop. The stock has dropped 20% year-to-date.
Company performance
Revenue increased 9% year-over-year to $32.1 billion in Q4 2022, beating market estimates. The top line growth was driven by an 8% revenue increase in the China commerce segment. Adjusted earnings per ADS decreased 23% YoY to $1.25 but came above expectations.
Annual active customers globally reached approx. 1.31 billion for the 12 months ended March 31, 2022. Alibaba reached its goal of 1 billion customers in China amid headwinds that impacted supply chains and consumer sentiment. The company’s global consumer-facing businesses generated $1.3 billion in GMV.
China commerce business
For the 12 months ended March 31, 2022, Alibaba’s China consumer-facing businesses generated GMV of approx. $1.25 billion. For the same period, the China commerce segment had a combined 903 million annual active customers, representing a quarterly net increase of 21 million. This growth was driven by the successful execution of the company’s multi-app strategy to create personalized experiences for users of various demographics.
Taobao and Tmall witnessed high consumer retention. In FY2022, more than 124 million annual active consumers each spent over RMB10,000 on Taobao and Tmall. Approx. 98% of customers who used these two platforms in FY2021 continued to be active on them in FY2022. In FY2022, online physical goods GMV of Taobao and Tmall, excluding unpaid orders, recorded year-over-year low single digit growth.
The resurgence of the COVID-19 pandemic in China has impacted Alibaba’s business to varying degrees. The company saw a low single digit decline in revenue growth in April compared to the same period last year. Online physical goods GMV of the company’s China retail marketplaces, excluding unpaid orders, witnessed a year-over-year decline in the low teens percentage in April.
While user traffic and engagement have remained resilient during the pandemic, consumption patterns across categories have changed. Demand for essential supplies such as food and FMCG products have increased significantly as customers stockpile at home. Categories such as healthcare, activewear and outdoor products have also seen growth whereas consumption of fashion and electronics has seen a decline.
Outlook
Amid these uncertainties, Alibaba decided not to provide guidance but the company believes it will continue to generate strong operating cash flow to maintain strategic flexibility. In FY2023, Alibaba plans to focus on sustainable high-quality revenue growth and optimizing its cost structure to improve returns.
Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!
Most Popular
CCL Earnings: Carnival Corp. Q4 2024 revenue rises 10%
Carnival Corporation & plc. (NYSE: CCL) Friday reported strong revenue growth for the fourth quarter of 2024. The cruise line operator reported a profit for Q4, compared to a loss
Key metrics from Nike’s (NKE) Q2 2025 earnings results
NIKE, Inc. (NYSE: NKE) reported total revenues of $12.4 billion for the second quarter of 2025, down 8% on a reported basis and down 9% on a currency-neutral basis. Net
FDX Earnings: FedEx Q2 2025 adjusted profit increases; revenue dips
Cargo giant FedEx Corporation (NYSE: FDX), which completed an organizational restructuring recently, announced financial results for the second quarter of 2025. Second-quarter earnings, excluding one-off items, were $4.05 per share,