Temu owner PDD Holdings sinks after Q1 net income misses by more than 40%
Shares in PDD Holdings — the company behind Temu, America’s favorite cheap e-commerce site — are themselves on discount this morning, dropping as much as 17% in early trading after Q1 earnings.
Sales for the Chinese internet company, which owns online retailer Pinduoduo as well as Temu, came in at RMB 95,672 million — well shy of analyst expectations for RMB 103,127 million. Further down the P&L, things were even uglier, with net income coming in at RMB 14,742 million, some 43% less than the RMB 25,890 analysts had forecast, per FactSet.
In the press release accompanying the results, company leadership did not, surprisingly, point to tariffs as the reason for challenges it faced in the quarter. Instead, Lei Chen, a PDD founding member and co-CEO, said that they had “made substantial investments in our platform ecosystem to support merchants and consumers amid rapid changes in the external environment,” which had “weighed on short-term profitability.”
Two weeks ago, the Trump administration slashed tariffs on small parcels from China from 120% to 54%. As retailers like Temu and Shein scramble to adjust to the end of the “de minimis” exemption, some have taken to shipping products in bulk to local warehouses in the US.
