SHANGHAI - Dada Nexus Limited (NASDAQ:DADA), a prominent player in China's on-demand retail and delivery market, has reported a revenue shortfall for the first quarter ended March 31, 2024, leading to a 5.47% drop in the company's stock.
The company's revenue of RMB2.45 billion fell short of the analyst consensus of RMB2.68 billion. This revenue miss prompted a 5.4% decline in the company's stock price, reflecting investor concerns over the company's financial performance.
For the first quarter, Dada Nexus reported an adjusted net loss per share of -RMB0.18, which was an improvement over analyst expectations of a -RMB0.62 loss per share. Despite this beat on earnings, the company's revenue declined by 3.3% year-over-year (YoY), from RMB2.535 billion in the first quarter of 2023 to RMB2.452 billion in the same period of 2024. The decrease was primarily due to a decline in JD (NASDAQ:JD) NOW services, which saw a 28.4% drop in revenue, overshadowing the 56.7% increase in revenue from Dada Now services.
The company's management attributed the revenue decline to strategic investments in customer experience, including the implementation of a delivery fee waiver program and a reduction in the free delivery threshold. These initiatives are part of a broader effort to integrate fully with the JD.com ecosystem under the rebranded JD NOW service. "We are determined to fully embrace the JD.com ecosystem in a customer-centric approach and are making dedicated investments to improve customer experience," said Mr. Bing Fu, Interim President of Dada.
Despite the revenue miss, the company's CFO, Mr. Henry Mao, expressed confidence in the company's long-term growth prospects, citing strong momentum in user growth. "While the voluntary business adjustment and investment in user experience may bring pressure to JD NOW’s overall revenue growth in the near future, we are encouraged to see that our core metrics including user growth have resumed strong growth momentum," Mao stated.
Dada Nexus has also been active in social responsibility initiatives, earning recognition from the Shanghai Yangpu District Government and partnering with Haleon to provide health supplements to its riders.
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