PDD Holdings stock plummeting on Q2 revenue miss

Shares of Temu parent company PDD Holdings (PDD), also known as Pinduoduo, are sliding lower ahead of Monday's market close. The Chinese e-commerce retailer reported disappointing second quarter earnings results, falling short of revenue estimates and revenue guidance expectations. The stock has fallen by nearly 30% in today's session.

Market Domination's Josh Lipton and Alexandra Canal break down the details, discussing how the weakening Chinese economy has impacted retail companies within the country.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Angel Smith and updated by Luke Carberry Mogan.

Video Transcript

Shows.

Atiu owner PDD Holdings are sharply in the red after the company missed earnings and revenue estimates.

Weakness in the property sector also high unemployment rates have led to Chinese consumers cutting back on spending.

That has hurt retailers significantly.

And this might sound like deja vu because we talked about this last week with some of, UH, Pinduoduo PD DS, uh, competitors over there when you take a look at Alibaba.

Some of the trends there elsewhere, some of their other larger rivals have also struggled just a bit.

And a lot of this is because of the fact that we have seen a weakening economy, a struggling economy that has taken much longer than initially forecasted to recover.

So many of these companies up on your screen right now have had to pivot in the near term, have had to revise some of their outlook there, revise their businesses to better align with what the what the demand is going to look like here in the coming quarters.

Yeah, big bummer here for PDD and you think about some of what the company had to acknowledge, and they were pretty month within this earnings release, while encouraged by some of the progress that we've seen.

You know, maybe I'll zero in on two bright spots, at least total revenues.

That was up 86% from the same quarter last year, operating profit That was up as well by about 100 and 56% from the same quarter.

Now back to the bad stuff.

While encouraged by the solid progress that they had made in the past few quarters, they said, We see many challenges ahead.

The chairman, uh, and co chief executive officer saying that they're gonna initiate this transition towards what they're calling high quality development and fostering sustainable ecosystem and gonna be investing heavily so you could see more money going out the door, or at least be put into some of the strategic areas where they would like to continue to bolster, uh, the year over year growth that we saw in revenue and then see that transition into, uh, operating profit growth as well.

But at what extent?

And I think, uh, hopefully we'll get a little bit more colour around that in future quarters as well, just to see what that spend does look like