Temu-Owner PDD Holdings Stock Nosedives On Downbeat Q1 Revenue Dragged By Trump Tariffs, Weak Demand

Temu-owner PDD Holdings’ (PDD) shares fell nearly 19% in pre-market trading on Tuesday after the company’s first-quarter earnings missed Wall Street expectations.

The Chinese firm’s first-quarter (Q1) revenue stood at 95.67 billion yuan ($13.30 billion), lower than an estimated 102.35 billion yuan, according to Stocktwits data.

While PDD’s revenue grew 10% year-on-year, this was its slowest quarterly growth in three years.

The company’s net profit tumbled 47% to 14.74 billion yuan, significantly lower than the FactSet consensus estimate of 26.13 billion yuan, according to a Reuters report.

Weak demand and President Donald Trump’s tariff-induced trade uncertainty hurt the company’s global expansion plans.

PDD’s chairman and co-CEO, Lei Chen, said that Q1 profitability was impacted by “substantial investments” in the company’s platform to support merchants and customers.

Chen added that this would improve the company’s health in the long term.

“Amid growing uncertainties, we see enhanced merchant support as essential to building a healthy merchant ecosystem that can deliver satisfactory shopping experiences for consumers,” said PDD co-CEO Jiazhen Zhao.

Uncertain business environment remained a theme across the statements issued by PDD’s leadership, with Jun Liu, PDD’s VP of Finance, adding that the company’s investments would help merchants and consumers in these times.

“As communicated previously, a slowdown in growth rate is expected as our business scales and challenges emerge. This trend has been further accelerated by the changes in the external environment in the first quarter,” Liu said.

PDD’s expenses rose at a higher pace than its revenue – the company said that its cost of revenue surged 25% YoY to 32.97 billion yuan due to an increase in fulfillment fees and processing fees.

Its operating fees rose 37% YoY to 28.43 billion yuan due to an increase in sales and market fees.

This comes amid a trade war between the U.S. and China, after a tit-for-tat hike in levies, the two countries announced a 90-day pause on reciprocal tariffs earlier this month.

PDD’s American Depository Receipts (ADR) have surged nearly 23% year-to-date, but declined 20.36% over the past 12 months.

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