Meituan
stock tumbled Friday after the Chinese food delivery giant warned of a slowdown in the current quarter, signaling the country’s economic woes may be starting to hit its biggest companies.
“For our food delivery, we expect [in] the third quarter…the volume will slow down, but still be more resilient than other consumption-related sectors,” CEO Wang Xing said on the company’s earnings call. He added that
Meituan
has seen short-term headwinds, citing macroeconomic pressures and extreme weather conditions.
“The change of consumption power due to the current macro environment will impact demand for food delivery to a certain extent, especially for some price-sensitive consumers,” he said.
The company’s Hong Kong-listed shares fell more than 5% after Wang’s comments appeared to overshadow Meituan’s strong sales in the second quarter. Revenue jumped 33% to 68 billion yuan ($9.3 billion), beating analysts’ expectations of 66.8 billion yuan, according to FactSet data.
Alibaba
(BABA) stock fell 2.3% in Hong Kong, while
JD.com
(JD) closed 2.4% lower. The American depositary receipts (ADRs) were largely unmoved in early premarket trading.
China’s largest internet companies including Alibaba and
JD.com
don’t typically provide specific guidance, so Wang’s comment could be a significant indication of the impact the country’s economic pain on third-quarter earnings and beyond.
Write to Callum Keown at [email protected]
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