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Investing.com - ZTO Express (NYSE:ZTO) on Wednesday reported second quarter earnings that fell short of analyst expectations, as the Chinese delivery giant navigated challenging market conditions despite strong parcel volume growth.
The company posted adjusted earnings per ADS of RMB2.48 ($0.35), below the analyst estimate of RMB2.89. Revenue rose 10.3% YoY to RMB11.83 billion ($1.65 billion), missing the consensus estimate of RMB12.28 billion.
ZTO’s parcel volume increased 16.5% YoY to 9.8 billion parcels, outpacing its revenue growth as unit economics declined. The company’s shares showed minimal movement following the results.
"During the second quarter, ZTO further narrowed the gap to industry average growth rate despite continued industry mix-shift towards lower unit economics," said Meisong Lai, Founder, Chairman and CEO.
"Supported by leading service quality, we achieved over 9.8 billion parcels and delivered 2.1 billion of adjusted net income."
Gross profit decreased 18.7% to RMB2.94 billion ($411 million), with gross margin contracting to 24.9% from 33.8% a year earlier. Net income fell 24.8% to RMB1.96 billion ($274.2 million).
The company declared an interim dividend of $0.30 per ADS, representing a 40% payout ratio.
ZTO lowered its 2025 parcel volume guidance to 38.8-40.1 billion parcels, representing 14-18% growth YoY. CFO Huiping Yan noted that retail volume growth remained strong at over 50% compared to last year, contributing positively to overall margin.
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