By Tracy Qu

JD.com reported better-than-expected earnings for the first quarter as Chinese consumer sentiment improved despite the online retailer facing fierce industry competition at home and trade uncertainty abroad.

The Beijing-based company said Tuesday that net profit jumped 53% to 10.89 billion yuan, equivalent to $1.51 billion, as revenue increased 16% to 301.08 billion yuan. Both measures topped analysts' estimates compiled by FactSet.

"We saw a strong start to the year, with solid results on both the top and bottom lines," Chief Executive Sandy Xu said. The results were supported by better consumer sentiment and continued enhancements to JD.com's supply-chain capabilities and user experience, Xu said.

The forecast-beating earnings come even as the online-shopping giant contends with a more fragmented e-commerce landscape in China, where younger peers such as discount retailer PDD's Pinduoduo and ByteDance's short-video app Douyin are gaining popularity by adapting to consumer trends and offering new, interactive ways of making purchases.

Adjusted net profit, which excludes share-based compensation and fair-value changes of long-term investments, among other items, climbed 43% to 12.76 billion yuan for the quarter.

JD.com's retail sales, which make up the bulk of its revenue, rose 16%, while logistics sales increased 11.5%.

Part of JD.com's strategy to stay resilient has been to expand aggressively into China's on-demand delivery market since early this year, taking on the likes of Meituan and Alibaba Group. The company recently announced plans to hire 100,000 full-time riders to grow its new food-delivery business.

Concerns about the impact of tariffs have been clouding the outlook for Chinese e-commerce players, with several having to raise prices as the U.S. hiked duties on foreign goods and scrapped a measure that exempts low-value goods from tariffs.

JD.com, however, is relatively well-positioned amid those uncertainties given its limited exposure to cross-border sales, Citi analysts said in a research note.

The de-escalation of tit-for-tat tariffs between the U.S. and China could also brighten the outlook for retailers. Shares of JD.com and several of its peers advanced after Monday's news that the two countries had agreed to lower tariffs. The company's American depositary receipts fell more than 1.5% in premarket trading after the results.

Another tailwind for JD.com lies in China's efforts to boost domestic consumption, particularly via its trade-in program to encourage consumers to swap goods like phones and home appliances.

Beijing recently unveiled a policy package to help buoy consumer demand; however, given the detente with Washington, analysts at Citi think the next tranche of policy support could be further down the line unless the economy shows more signs of weakening.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

May 13, 2025 06:20 ET (10:20 GMT)

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