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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03-25-26 0815ET