PDD Holdings, the parent of the online marketplace Temu, saw its stock sink more than 28% on Monday after the company posted worse-than-expected earnings for its fiscal second quarter, which included revenue miss.
PDD reported revenue of 97.06 billion yuan ($13.64 billion), an 86% increase compared to the same period in 2023. However, this was still not enough to meet the analysts’ expectation of 100.2 billion yuan ($14.1 billion).
The company did manage to surpass the estimates on earnings per share. It reported adjusted earnings per American depositary share (ADS) of 23.24 yuan ($3.20), a 122% year-over-year and comfortably over estimations of 10.47 Chinese yuan ($1.47).
After its Temu marketplace took the United States by storm last year, being the most downloaded mobile app last year, PDD has struggled to keep the momentum going. It is facing far more competition while also facing a number of other challenges.
“Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges,” PDD Vice President of Finance Jun Liu said in a press release. “Profitability will also likely be impacted as we continue to invest resolutely.”
PDD’s stock has opened 28% down on Monday and shed some additional value throughout the day to come below 100$ per share for the first time since September 2023. The stock is currently 31.58% down year-to-date.