MW Temu parent's stock drops as end of 'de minimis' tax rule comes at a cost

By Tomi Kilgore

PDD's profit and revenue fall below expectations, as investments to deal with supply-chain changes take a toll

Temu parent PDD's stock falls after earnings miss expectations.

The U.S.-listed shares of China-based PDD Holdings fell in early Wednesday trading, after the parent of discount e-commerce giant Temu missed earnings expectations, citing investments needed to deal with supply-chain issues.

The issues include U.S. President Donald Trump's ending the "de minimis" exemption, which allowed imported goods with a value of under $800 to be excluded from customs and tariffs. That change hurt sales for big discounters out of China, like Temu and rival Shein.

Jun Liu, PDD's $(PDD)$ vice president of finance, said the company will continue to explore and make investments as the external environment and competitive landscape undergo "rapid changes."

"These investments are firm and long-term, and will inevitably affect our financial performance," she said in a statement.

PDD's stock slumped 1.5% in premarket trading. It had dropped 13.5% this year through Tuesday, and closed Friday at an 11-month low, after rising 16.9% in 2025.

The company on Wednesday reported fourth-quarter revenue that rose 12% from a year ago to RMB123.91 billion ($17.72 billion), but that was below the average analyst estimate compiled by FactSet of RMB124.5 billion.

Adjusted earnings per share, which excludes nonrecurring items, fell to RMB17.69 ($2.53) from RMB20.15 and missed the FactSet consensus of RMB20.84.

"Going into this new chapter, supply chain investment is where we will place our greatest conviction," said co-CEO Jiazhen Zhao. "We are committed to dedicating significant resources, with an all-in mindset, to drive lasting benefits to the entire ecosystem."

-Tomi Kilgore

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March 25, 2026 08:15 ET (12:15 GMT)

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