PDD Holdings Inc. (NASDAQ: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 ...