<p>Shares of <strong>ATRenew Inc</strong> (NYSE:RERE) came under pressure in early trading on Wednesday, after rallying almost 12% follow the release of the company's first-quarter results.</p>



<p>The leading player in China's circular economy reported strong growth in both revenue and profitability, crediting its performance to a strategic shift toward direct-to-consumer retail and the continued expansion of its trade-in services.</p>



<h2><strong>Revenue And Profit Growth</strong></h2>



<p>Total revenue for the quarter reached RMB 6.16 billion ($903.89 million), up 32.4% year-on-year, surpassing the high end of the company's guidance. This growth was driven mainly by product sales, which climbed 34.4% to RMB 5.73 billion ($840.79 million).</p>



<p>Non-GAAP operating profit grew 70.2% to RMB 190 million ($27.88 million). The company's non-GAAP operating profit margin expanded to 3.1%, from 2.4% in the year-ago quarter.</p>



<h2><strong>Shift To Direct Retail</strong></h2>



<p>ATRenew's results were boosted by its &#34;1P-centric&#34; (first-party-centric) strategy, which focuses on recycling and trading electronics. The company has been transitioning away from being a wholesaler to selling refurbished goods directly to end users.</p>



<ul>
<li>Direct retail (1PtoC) sales accounted for 45.1% of total product revenue, up from 33.0% a year ago.</li>



<li>Revenue from the company’s compliant refurbishment business grew 76.1%.</li>



<li>In March, monthly sales of refurbished products through the “Paipai Selection” channel surpassed RMB 200 million ($29.35 million) for the first time in the company's history.</li>
</ul>



<h2><strong>Strategic Partnerships And Outlook</strong></h2>



<p>ATRenew continues to benefit from its close association with <strong>JD.com</strong> (NASDAQ:JD). Trade-in orders within the JD channel now account for approximately 70% of ATRenew's total volume.</p>



<p>Beyond smartphones, the company's multi-category recycling business, which includes gold and luxury items, reported GMV (gross merchandize value) growth of 81.5%. To support this volume, the company has expanded its physical presence to 2,156 stores.</p>



<p>Management guided second-quarter revenues between RMB 6.24 billion and RMB 6.34 billion, representing 25%-27% year-on-year growth, representing a slowdown from the first quarter. Management’s cautious outlook comes against the backdrop of weakness in the macro environment and inventory build-up. </p>



<p>ATRenew repurchased approximately 2.3 million ADSs for about $10.6 million and has $39.4 million remaining for the next 12 months.</p>



<h2><strong>Price Action</strong></h2>



<p>Shares of had declined by 9.76% to $4.53 at the time of publication on Wednesday, after climbed 11.56% to close at $5.02 on Tuesday.</p>



<div>


<p>
<strong>
Read Also:

JD.Com Analyst Raises Estimates On Recovering Profitability, Earnings Inflection
</strong>
</p>


</div>


<p><em>Image: Shutterstock</em></p>

09618

RERE

EBIZ

IBUY

<p>ATRenew reported strong Q1 results with a 32.4% revenue increase to RMB 6.16 billion, driven by direct retail and trade-in services. The company anticipates Q2 revenue growth of 25%-27%. Despite a 12% rally post-results, shares fell 9.76% to $4.53 amid macroeconomic concerns. ATRenew's shift to direct retail has boosted profitability, with non-GAAP operating profit up 70.2%. The company continues to expand its store presence and strategic partnerships, particularly with JD.com.</p>

- ATRenew Inc's shares fell 9.76% on Wednesday after a prior rally following strong first-quarter results, reporting a 32.4% year-on-year revenue increase to RMB 6.16 billion ($903.89 million).  
- The company's shift to direct-to-consumer retail, particularly through its refurbished product strategy, contributed to a 70.2% rise in non-GAAP operating profit, reaching RMB 190 million ($27.88 million).  
- Despite this growth, management's cautious outlook anticipates second-quarter revenues between RMB 6.24 billion and RMB 6.34 billion, citing macroeconomic challenges and increased inventory.

ATRenew Reports Strong Q1 Results As Direct Retail, Trade-In Volumes Surge