Q2 2019 Earnings Call
At this time all participants are in listen only mode. After management's prepared remarks, there will be a question. So.
Today's conference call is being recorded.
Oh, that's right <unk> what is your host Ms. Julie go month Board Secretary of the company. These go hedging.
Hello, everyone and welcome to the second quarter of 2000 <unk> earnings Conference call all of the Holdings limited.
The company's reads out what you should do better.
You bet on services earlier today and have been posted online you can download the <unk>, that's really and then up to the Companys distribution.
Just Oh section on our web site at <unk>.
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Please note that today's discussion will contain forward looking statements made into this at harbor provisions the uptick that's it.
The Securities Litigation Reform Act.
Oh 1995 forward looking from Iceland, and the form 10, Yes, I felt this is <expletive> Yes Securities and Exchange Commission.
No [laughter] patients to date any forward looking statement, except as required under applicable law.
Please also note that's over these past release this conference call include discussions.
And I did yes, Ben <unk> formation as well as an oddity then yes financial matters.
<unk> earnings press release contains a because of the Asian upbeat and all they did that yep that rose to the UN audited most directly comparable GAAP measures.
Ladies and gentlemen, intuition would enjoy.
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Hi, Jim.
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Woman a goal that somebody was the one hundreds of new jobs.
What's your woman by Moody's in July .
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Would you attribute to him in a woman January .
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During the June 18 shopping that he will diminish a white leading job of cross over a membership all patient multi potent <unk> deep hole basketball.
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We also launched joined membership program this business partners such as <unk> <unk>.
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So they show news Shelby good finding them evolve.
Thank you Louis before it seems like I was just for good Yeah couple of one time, all cool bed bugs, but truly men milici team at least five thanks.
In the quarter, Joe will then Oh staffed on Strensiq zoo Curations product the portfolio and he didn't brand relationship there [laughter] after sector.
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If you're not using us for that hotel this year, they thought that called US. Your team has incurred so cool that you did you enjoy the feed food footage entry the ugly I can't.
Hi, James on for Josh.
Oh boy message each other shocking how you found I, usually yochim Alicia finds itself crossed over a marketing and branding campaign not only empowered domestic and international high end fashion brands. This new retail they chose to expand their customer base in China, but also essentially out of it [laughter] then inflows.
HM.
Oh, you mean, I mean, not all these losses.
Hi, Ben.
Moving to London exclusive sales.
That's all [laughter] exemplified by the initial entre observation.
Limited edition action, which is totally behind that jump.
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Admission.
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Hi, Tim.
HM.
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Hi, John do you think you'll certainly see nothing at all.
And your assumption one golf ball ball, it's Joel just on leases.
As Asia's largest high and that's the last step that from school is dedicated to building up a global supply chain system.
That means.
Together they call it keep her that's through our high end customers. This name they signed a collaboration agreement is a well known Japanese logistic.
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That's good.
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Yeah.
Probably some football.
Jim Jones Young men.
Yeah and just.
Sean Josh.
Yeah.
Can you talk about just what do you do if it's important you don't call young children.
She's I'm just doing Angeles Audiocodes send me some color on just fine.
<unk> idea Cushing yashin, who have already own bottles as well as usual I didn't you know Hopkins <unk>, what do you know how do think posh at home.
As a nation to doing schools for the lingering upgrade conference held in the second quarter.
Cool is great snap on tools that are empowered motion is the aim to deliver the most iconic he says Ah onez for a high end customers that never age you know I'd love the big data technologies that enhance the buying a platform based services and operational management part two commands to be improved merchandise operation no capacity and good customer service quality all day to oust [laughter] I joined.
Laboratory in June two Oh, yeah, authentication system, and intelligent content distribution system utilizing they hurt.
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Well I do some quick he or she can change in Austin.
Yeah, you know for that can you know she's Holly you told me John probably what would you say if you do the pedal that you bought the shift.
John John Cleese, Cnpad, Yeah, Matt Hi, Susana assumption.
Well Jim teacher.
We shot the social platform such as.
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760000 followers, they've accumulated lack of or 6.7 to 8 million baby you viewership, reaching over seven money.
HM.
Because they are a third party data research institution, among the Doe <unk> 35 cameras Brent this.
So we have.
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HM Oh, most does come back and that eventually will come back a bit.
Oh, they upgrade their video content HM.
Good to see you there that empty.
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They have developed and launched it mainly program I do and the women's basketball.
Appealing to a broader user base is as if he does.
Well, Oh, bringing that was high end shopping computers to all consumers.
Well I mean do you shoot for Josh I talked in Kenya that don't change on social this union. So most of the Jugos, which is all that seemed to enjoy watching path.
Oh, Gee bicycles says homes consumed zone I mean, yes.
She's oh, well use odds shoes on usual Columbus, Georgia, So willingly surgeons with the Jewish as usual to surgeons and can do that.
Let's hope, which I'm interpreting June should have yet woman the movie all she's young Golden Monkey that up and bought a assassins intuiship wajid. She I saw that they were down slightly.
They continue to do well our unique new retail model utilizing online retail experience to drive new sales.
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And so that's what I would do it but you got to jump on that.
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Okay. That's helpful Walter Nice things too.
Okay. Thank you.
Right.
Yes, the only other seems uncomfortable.
The little phone jollibee, yielding little demo sanction phone, but she's done well. This is John first of all that.
The pin pads that yeah digital they're told for holidays, showing you that teaching the ideal one goes well the team has done.
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Attacked a lot with advertisers such as.
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Yeah, Okay and Paul.
But also extended to call patient there either.
Across the broader industry include travel so.
And the Royal Caribbean cruise.
Bob.
Hello, Brent Lululemons Athletica, a C.C.E.D. Calibrin Samsung HM.
The tender baby rent a center.
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Apple watch so called her.
Have collaborated with that and then the one off.
[laughter] Hi, Mike.
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Hi, Walter.
You bet.
Yeah, China beauty ephesians showcasing some crews capability to compete head to the NATO friends that leveraging his marketing solution.
Big data technology and stuff.
G single gene.
Pardon me I mean, Copley and the phone should fusion woman, both gold and silver team, how they know what pulled off.
Heading into the second half of this year.
They remain dedicated to providing consumers with the open pits Saf from pro whitening.
<unk> broadened selection and upper upscale hurt us and it's a visit to enhance customer engagement and to optimize their shopping.
They will continue to fortify they enjoy we ship it upscale applying consumption screen, including the deployment Oh pet store in your high end shopping more and open doors.
That's always should yield entice you to others on pods, yeah couple of ownership.
[noise] well then we will continue our efforts in its then crossed over a partnership its top international Ben.
Launching exclusive products to end marketing activities that address.
Unique among our consumers on scoop that thought.
No further elevating our brand image and acquiring exclusive supplied her that's what you see.
It is.
Across all our partners.
Model and Uh Huh.
Yes.
That's.
That's a little left to go in collaboration there's not a lot of the automaker Brett.
Hi, Giovanni woman jumped from let's say, a woman's about food or something that you do.
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On the technology front yen change, you'll find really that's going on t. shirts, he shouldn't warm the Gi Judy.
Well I mean do you don't watch over the Jews, you'll get you'll just Jim himself for the young you don't need tremendous engine.
He also woman can digest, Jean Hu with other funding changes well things on the shuttle series yet.
Yeah firmly committed to our business model and build strategy Leach, Oh, well aligned with our value proposition, providing a richer and more diversified product portfolio.
Mm their brand relationship across the globe and domestically.
Then the loan types, the financial system and improving the technology could have.
They have Saudi its conviction notice <unk> future prospects and Oh gross momentum, that's not confident that Chinese consumers desire and its capabilities to pursue a market, whose so to say that it's flat consumers a lot of mobility. Thank you.
Yeah, I mean youre minutes, Yeah, Oh Gee, how do you know what do you find that daschle luxury although you knew well, Taiwan, Hong Kong Miss that I will now turn the call over to our CFO Mr. Shelton, Chen who will discuss our key operating metrics and financial results.
Thank you Chuck and how.
But do you do.
Let's see.
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For men.
Once again.
Patent system, So again Keith.
Molly me way back when it's just happy with you.
Yeah, I was looking into two things I'm not seeing build up at India.
Sure last woman Teachey polishing leases.
And he or she seemed like a movie you can't yes, you're right and a family.
Well then thank you Julie you weigh what my thoughts.
Okay. So cool that's easier yeah.
Oh sure can you guys yodlee.
How are you.
You bet.
So you see that.
Yes.
Yes, she is very very real bad debts, Oh, yeah, having your HM.
700.
Well.
Matt <unk>.
But 8.3% year over year exceeding the high end of our guidance range.
Given the increasing contribution from our market.
And 60 basis points compared to it.
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Yeah.
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They should.
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On the nose to seize the opportunity is that.
Yes, well that doesn't sound so no big deal and you got to do a few things that's high dose will be.
Now I'd like to talk to.
Through our detailed financial they've done.
Mm Hmm.
Hardly any doing yeah people.
Again, we sell to about 47500 deal if you will what do you feel.
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Sounds rather than through yet.
Junior influence you in <unk> city.
Jim Day, he says that by that time, I think 9% to RMB three point tend to pay for that.
Oh, then Nigeria from 450.
So then for that part up to that.
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Yeah Yeah.
The second quarter of 2019 increased by 14.3% to [laughter].
Yeah, I'm <unk> 1.71 setting from.
One point [laughter] setting in the second quarter of 2008.
Primarily attributable to the change in U.S., finishing off a appreciating or flash offering our merchandise and so this is combined there's oh 80 of the N.V., that's its marketing activities driving that itself.
Oh no.
[laughter].
Others. So.
Doing all right.
Yes.
Well shown or trends.
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Well it depends on timing it sounds like the audiences she union, let's wait and see.
The answer is yes.
[laughter] revenues include stuff by 9.3% two yes, so the 388 million for the second quarter of two.
Nike.
From HM.
Injured and 96 muddy for the second quarter of 2018.
Beach in line is the increase of total net revenues.
Collin Jones, New York people.
Woman's on multi year and I'll give me some idea.
Mhm.
Okay.
Yeah.
And just if I didn't see it.
Influence.
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Well that and yet.
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[laughter] HM.
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Okay, well, many so the second quarter of 2008.
Gross margin or.
18.9% for the second quarter of 2000, <unk> increased by 60 basis points from 18.3% for the second quarter of 2008.
How are you doing in New York City, the woman that still need to see on we didnt.
Oh, yes, she CEO Tony agenda, <unk> fundamentals in the Sunday and <unk>, Jude and phones, you read the movie and again.
Yes.
Good afternoon.
Yeah.
Operating expenses increased by 63.8% to RMB 210 to save money for the second quarter of two other Nike from RMB enjoyed and 67 net for the second quarter of 2018.
Now I'd like to walk you through the company's expense items in detail.
Pardon me doing in DRG, two well known what will you say you don't lose any <unk> Oh fulfillment expense increased by 49.8%, So HM Forte fun too many.
Second quarter of 2000 <unk> from <unk>.
So many.
Oh.
The increase was primarily attributable to increase our sales volume, including does a party payment.
That's what it is that if that's compensation and benefits during the period.
Our lead Union Theological Gionfriddo wage and maybe Keith you aren't you.
Oh regions on by which you should get hot.
Junior influence you read and beats spotchem fueled by one.
Just on the off we go sure Josh is I'm sure Josh is on Threeq well, Okay I change on the <unk>.
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Joe the yen Ching Oh, we should have been done.
<unk> expense increased by 17.2% to RMB uninjured and take too many for the second quarter of 2019 from RMB 18 Night woman, Yes, I feel we then indeed young share Wabash Eastland and Puente regions on by Mr. Austin Sunday lunch.
She Union <unk> young Chile, Central I guess, just on yellow Green you Coolsmooth Java seasonal yes, that's on the coal.
<unk> youngest rental fleet has been done.
Technology and content development expense increased by 10% to 3.7%.
If that money so.
HM <unk> 0.84.
<unk> 2008.
Pardon me.
Yeah June Chiba Newish, one yet.
Yeah, you bet judo younger unchanged, hopefully that Jim Johnson <unk> tissue failed bank are younger than down.
Oh general and administrative expenses increased by.
87.6% to RMB 51.9, many fold or second quarter of 2019 from RMB 10 to 7.6, many for the second quarter of 2018. The increase was primarily attributable to the increase in staff compensation and benefits during the period and the rise in professional fees and office expense charge during the period.
How are you doing in DRG to form and the Union <unk>, Chile, partially yes.
Well there are several Hollywood false. Your question, then got push or pull through but he invites <unk> Michelle Gimpy Lake Cordano Goodyear was shandy and self funding issue. She pulled who you sounds like Gordon Josh Olins Union, you ought to do the Union leeway.
Our income from operations was RMB 15.
Point too many.
For the time and you're sure they are.
The recorded a net income of RMB four tape like lamenting for the second quarter of 2013, representing an increase of 10.2% compared with 36.4, many unfold does happen on her off 2018.
For monthly on easier when you see some people they get Scott.
Now for a full quarter of 2019 <unk> outlook.
Please and if you're supposed to do.
Yes, Jamie social who resides I mean, he's just your core JV Archie.
Job Chinanet shooting pool, She's just say I'm, Josh Lewsey five false claims are there should be a positive. The companys current <unk> bass told told me that he knew folder caught her 2009 <unk> to be in the range of RMB.
0.9 billing and HM.
Two billing.
Leach represent his of truck made apt to change.
This concludes our prepared.
Oh and the car to questions. Operator. Please go ahead.
Ladies and gentlemen will allow begin the question and answer session.
If you wish to ask a question. Please press star one on your telephone and wait for anything should be announced.
If you wish to catch request please press about asking.
For the benefit of all participants on today's call. If you wish to ask your question to match match in Chinese police immediately repeat your question in English.
Your first question comes from the line of Ken Chong from Jefferies. Please ask your question.
[noise] Oh Qualys anyhow.
I want to see what you can do so much I wonder if you would be going to you know to all your questions or do you think are Judah. So when I say that comes out but I know the buyback in June time into such a little bigger sounds good so shipping that a compact pickup affiliate no I cannot jingdong and offers you know each individual well do you go into to this or the woman that he's out all the broadband and all the other ones usage.
Well I'm not going to call I'll take all fail, so what's kinda woman unless you're a young who attended you everything that has happened after the dosage and condo as out there marketing you just pick on say on jonathan's on his or her new Haida I'm not your meal you could see the woman who will run you got somebody kind of bigger picture. So you might say a one holder concordance. Thank you.
It is it is it will there be another dividend good through the winter.
Well there is over the whole year since our IPO by means of doing single cell phones and ship those jobs.
For me I should have a gentle, yes, only stands out jungle, Taiwan agenda.
Gain on border Goldman's Hanjin hook, all them I don't know Jim football.
Well to those who have been quite sort of thing.
Evolve.
We put a team have shown some team who will perform the function.
It requires the MLP on car that you call don't see I don't know how they sound talk where the team has engines at all.
I called out before you got off we aren't used to.
She wants to what Tony.
Yes, it was on yet.
Well they would have been bought a template for them you know quite yet or something for the team had a hold on.
You know Jim the woman in that order come up with that Yeah go faster they told us it should yes.
Well as I'm going to have I mean, it's all you don't but home.
Oh yeah.
Well me again, what do young woman, who that she is a woman we would adopt do do they use it they are hard to call your attention to hold helping them. This year finally.
Simply put on that hunger for yield probably woman that you know how to treat yeah. Yeah. Jim didn't then commented just where they use it isn't one that is wrong in the yield or cool for that just yet.
He said two or maybe July seems unusual that football.
Yes, according to our CEO .
That rate is high and online and offline shopping malls and platform to increase customer engagement through negotiated.
Including the pop Dora and Cobranded membership.
On the other hand, they have collaborated with numerous then to develop cross over a period at the end that Brent <unk> such as the transaction. The lift that you will be isn't to be organized in combination with most of that to differentiate our supply chain.
Yeah also leveraging our accumulated data assets.
Yeah, well I think there's really no huge such as <unk>, China Academy, right, and then and get that done.
Yes, that's the mark that they should.
Acknowledging for applying choppy and yeah based authentication technology.
Technology will provide that part.
For our business and Petsmart, and Oh, a competitive differentiation.
So difficult.
Yeah, I'm going to you know what about.
Bungee, though yeah, we will most as you noticed I'm sorry for the poor Jenson button with your shoes would be in Q.
I will follow suit in the T.D.E. coli since I don't know, but that's just to get some movies Oh I see.
Oh, he's done though.
Sure.
Oh yeah.
Okay.
Yes, Hi, Ethan.
Uh huh.
Oh in this quarter our agenda.
Yes, the bag, 95.9% from the year ago partner to our three planes to bedding and HM.
Yes, that's right.
40%.
1.7.
Well gross margin.
HM claim night.
Present, a increase of 60 basis points year over year or operating expense. This quarter was HM HM 273.6 million children.
Please Oh 63.8.
Person younger younger Leach is higher than the revenue growth, that's lower Oh, Jim Lico suite.
This increase is driven by their 10 juniors and a strategic investment in school spending market expansion, the marketing and maintain a language, there's the company's business and operation strategy.
Is that changing at Spanish Oh operation ended <unk> <unk> <unk> <unk>.
Operational efficiency.
That sounds good and.
[laughter] as it develops.
Yes.
Yeah.
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[laughter] [laughter] [laughter].
Oh [laughter], if you wish to ask your questions to management in Chinese [laughter] lease immediately repeat your question in English.
As there are no further questions.
Now, let's turn the call.
Oh Oh.
There's a copy for closing remarks.
Thanks, Lugging joined today, if you would.
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