JD.com profit jumps 21% as shares fall 8% on Joybuy spend

JD.com's non-GAAP net income rose 21% to RMB 8.9 billion in the second quarter, even as revenue slipped 2.9% to RMB 346 billion.

"The second quarter marked a definitive turning point for our profitability trajectory," Chief Executive Sandy Xu said.

JD Retail's operating margin hit a record 4.6% for a peak promotional season, with gross margin up 1.3 percentage points to 18.5%. Electronics and home appliance revenue fell 11.8% to RMB 157.9 billion on a high comparison base and upstream price increases, while general merchandise rose 5.6%. JD Logistics revenue grew 24.3% to RMB 68.1 billion.

Shares fell as much as 8.9% to HKD 112 in Hong Kong on Aug 14, with short selling at 16.2% of turnover, as Xu said investment in overseas platform Joybuy would rise in coming quarters. Management expects JD Retail growth to accelerate quarter by quarter in the second half.

The profit gain was driven by JD Retail's margin expansion and a more than 50% narrowing of losses at JD Food Delivery. New Businesses' operating loss shrank to RMB 9.9 billion from RMB 14.8 billion a year earlier. Marketing expenses fell 24.8% to RMB 20.3 billion, while research and development spending jumped 37.7% to RMB 7.3 billion as JD deepened AI integration.

Free cash flow for the trailing twelve months reached RMB 31.4 billion, up from RMB 10.1 billion a year earlier, helped by faster receivables collection. Cash and short-term investments totaled RMB 235.1 billion at quarter-end.

JD repurchased 69.9 million Class A shares for $1 billion in the first half, about 2.5% of shares outstanding, leaving $1 billion under its current program. The company has returned about $13 billion to shareholders since 2023 through dividends and buybacks.

Xu said electronics and home appliance growth should recover from the third quarter as the high comparison base fades, supply chain strength cushions price pressure, and AI-driven product innovation supports demand. Joybuy, which doubled revenue within two quarters, remains in an early capability-building stage, with investment expected to rise as scale grows.

The results show JD prioritizing margins and cash generation over top-line expansion in a sluggish consumer environment. Investors will watch the third-quarter report for evidence that retail growth has returned to positive territory and that Joybuy's losses stay contained.

This article is for informational purposes only and does not constitute investment advice.