China's $89 billion e-commerce giant JD.com posts slowest quarterly growth on record

JD.com beat top and bottom line expectations in the second quarter, but posted its slowest year-on-year revenue growth on record, becoming the latest victim of a Covid-induced economic slowdown in China.

But the company got a boost from better profitability in its main retail business and logistics division, helped by the annual "618" shopping festival that takes place in China in June.

Here's how JD.com did in the second quarter, versus Refinitiv consensus estimates: 

JD shares were up more than 4% in U.S. pre-market trade.

During the April to June quarter, China saw a resurgence of Covid-19 that led to lockdowns of major cities across the country, including the financial powerhouse of Shanghai, as authorities tried to contain the worst outbreak of the virus since the initial spread in 2020.

China's economy grew just 0.4% year-on-year in the second quarter. Investment banks have cut their full-year growth outlooks for the world's second-largest economy.

JD.com is not the only Chinese technology company suffering a fallout from the economic slowdown. This month, e-commerce rival Alibaba reported flat June quarter revenue for the first time while gaming and social media giant Tencent reported its first revenue decline on record.

Tencent and Alibaba have been cutting spending and reducing headcount as revenue slows in order to grow earnings in the coming quarters, with similar focus shown from JD.com too.

JD.com reduced marketing and general and administrative expenses for the quarter versus the same time last year. The Beijing-headquartered firm also narrowed losses in its new business segment and saw its logistics unit swing to an operating profit in the quarter versus the second quarter of 2021.

"We were pleased to post topline growth that outpaced the industry during a challenging period, as well as healthy profitability and cash flow," Sandy Xu, chief financial officer of JD.com, said in a press release.

"Our emphasis on financial discipline and operational efficiency has allowed us to return to shareholders in the form of share repurchases as well as a special cash dividend issued during the quarter. We will continue to focus on generating strong shareholder returns while maintaining our commitment to investing for the long term."

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