VIPS - Citi goes to sidelines on Vipshop citing retention challenge

Vipshop Holdings (NYSE:VIPS) had a better-than-expected third quarter, Citi says, but it's facing some retention issues from macroeconomic factors and has downgraded the stock to Neutral. The company benefited from "higher and more resilient spend" from SVIP members. But active customers only rose 1% from the prior-year period, and fell 14% from last quarter, to 43.9 million. While total orders ticked up 0.1% from the prior year, they're also down sharply from last quarter, -22%. That comes amid some weaker macro trends particularly for discretionary shopping, Citi notes. "Nevertheless, we caution whether the slower growth metrics suggest the beginning of more challenging growth ahead that could last longer than several quarters." SVIP member growth is good, as they come at an average revenue per user of 8-9 times that of regular users, with a higher retention rate. But while that's encouraging, "if VIPS faces issues to acquire and retain new

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Citi goes to sidelines on Vipshop, citing retention challenge