Boston, MA 10/23/2013 (wallstreetpr) – In what might well be a chilling news to investors, the online retailer E Commerce China Dangdang Inc (ADR) (NYSE:DANG) announced Tuesday, October 22, its retreat from the earlier guidance for the Q3.13 earnings. The retailer has now brought the hacksaw to its estimates, saying it expects and a loss and reduced revenue collection than earlier forecast.
But in this retreat, DANG might as well be speaking something about the recovery in China, perfectly saying that it isn’t firm enough yet.
The reason DANG is expecting reduced figures in its Q3.13 posting is because it says it reduced sales of its lower-margin products which in effect will impact negatively on its revenue for the quarter. The Chinese online retailer sells general merchandise such as books, personal care solutions and even software.
Following the review of its guidance, DANG now expects to net revenue of about $249.4 million and $251.1 million for the Q3.13. The previous guidance spelt $259.3 million. However, analysts had anticipated $262.9 million for the quarter.
Now DANG expects to witness a loss of between $4.4 million and $4.8 million following the retreat in the guidance.
Although the Chinese webs retailer is facing inevitable loss due to tweaks in its business activities, its executive chair Peggy Yu Yu says that reducing low margin in general merchandize was a novel thing for the company to do as its helping to improve margins from the high-end products.
The company is also looking into positive future prospect, now with reduced low margin products and efforts to entrench itself as a high-end customers’ online shopping mall. This move is expected to ensure that investors get perfect return on their investment in this web-based e-commerce retailer.
Generally, Chinese equities have not had a bad start in this week as evidenced by the performance in the previous two trading day.
In the Tuesday’s trading, DANG sunk 13.44% to complete at $10.05, thus standing at $1.35 billion in market capitalization.