PDD Holdings Inc (NASDAQ:PDD), the parent company of discount online retailer Temu, reported quarterly revenue below analyst estimates as weaker consumer spending hit its Chinese eCommerce platform Pinduoduo.
For the quarter, revenue was 97.06 billion yuan (US$13.64 billion), missing estimates of 100 billion yuan ($US14.02 billion).
PDD's finance chief Liu Jun said that looking ahead the company’s revenue growth would “inevitably face pressure due to intensified competition and external challenges.”
“Profitability will also likely to be impacted as we continue to invest resolutely,” Liu said.
Co-CEO Lei Chen added that, while the company is encouraged by the “solid progress” it has made in the past few quarters, it sees many challenges ahead.
“We are committed to transitioning toward high-quality development and fostering sustainable ecosystem. We will invest heavily in the platform’s trust and safety, support high-quality merchants, and relentlessly improve the merchant ecosystem,” Chen said.
“We are prepared to accept short-term sacrifices and potential decline in profitability.”
On a positive note, PDD’s adjusted earnings per ADS were $3.20, beating estimates of $2.73.
Shares of PDD plunged post-earnings, down more than 30.2% at about US$98 shortly before noon on Monday.