PDD Holdings Inc. PDD (PDD) stock slid Wednesday after the Temu parent reported mixed fiscal first-quarter 2026 results, as slowing Chinese consumer demand and rising investment spending weighed on profitability.

Revenue Growth Slows As Profit Declines

Revenue rose 11% year over year to $15.4 billion, or 106.2 billion Chinese yuan. The revenue from online marketing services and other businesses increased 2.5% to $7.24 billion, while transaction services revenue climbed 19.9% to $8.16 billion.

Total cost of revenue increased 15% to $6.8 billion, driven by higher fulfillment fees, server and bandwidth costs, and payment processing expenses. Operating expenses rose 2.9% to $5.77 billion.

Adjusted operating profit grew 15% year over year to $3.1 billion. Adjusted operating margin improved to 19.85% from 19.09% a year earlier.

However, net income fell 15% to $1.8 billion, while adjusted net income declined 17% to $2 billion.

Adjusted earnings per ADS came in at 9.51 yuan, down from 11.41 yuan a year earlier and below the analyst consensus estimate of 16.37 yuan.

PDD Cash Position And Competitive Pressure

PDD ended the quarter with $63.2 billion in cash, cash equivalents, and short-term investments and generated $2.4 billion in operating cash flow.

The company, a major rival to Alibaba Group Holding Ltd. (BABA), continues to face pressure from weaker Chinese consumer spending, fierce competition, and heightened regulatory scrutiny.

Supply Chain And Global Expansion Strategy

PDD executives said the company is entering a new phase centered on long-term supply chain investment, brand incubation and ecosystem expansion under its "build another Pinduoduo" strategy.

Co-Chairman and Co-CEO Jiazhen Zhao said PDD launched a dedicated first-party brand company in Shanghai with an initial capital injection of 15 billion yuan. The company also plans to invest 100 billion yuan over the next three years to strengthen supply chain integration and expand global brands.

Zhao said PDD is working with manufacturers across industrial hubs to develop products tailored for overseas markets while helping factories shift toward research-driven and consumer-focused branding models.

Co-CEO Lei Chen said the company sees supply chain capabilities as a key long-term competitive advantage and plans to continue investing in agriculture, logistics, manufacturing, and first-party brands.

Logistics And Rural Expansion Efforts

Management also highlighted logistics and rural expansion initiatives. Zhao said PDD expanded free shipping services to rural villages through county-level warehouses and pickup stations while reducing logistics costs for merchants in remote areas by as much as 80%.

PDD Stock Hits New 52-Week Low

PDD Price Action: PDD Holdings shares were down 7.97% at $88.94 during premarket trading on Wednesday. The stock is trading at a new 52-week low.