Trip.com Group shares declined steeply on the day, dropping 11.1% to trade at HK$314.4 after the online travel company reported a substantially weaker first-quarter profit and issued cautious guidance for the second quarter.
Net income attributable to shareholders fell to RMB 2.5 billion for the January-March period, down from RMB 4.3 billion in the same quarter a year earlier. Management said it expects total net revenue growth in the second quarter to slow to roughly 3% to 8% year-over-year, a significant deceleration from the pace seen in Q1.
Operational metrics for the quarter were mixed. Consolidated revenue rose 17% year-over-year to RMB 16.2 billion, a result that came in above Wall Street estimates. At the same time, non-GAAP earnings per share of $5.73 missed the consensus forecast of $6.14. The combination of an EPS shortfall and sharply reduced forward growth expectations weighed heavily on investor sentiment.
One notable institutional view came from Citi, which left its Buy rating intact and maintained a US$82 price target. Citi highlighted that Trip.com’s Q1 revenue exceeded both Citi and consensus estimates by about 2%, and that the non-GAAP operating profit margin of 28.6% modestly beat Citi’s own projection.
Despite such analyst support, market attention centered on the company’s forward guidance. The relatively subdued Q2 revenue outlook overshadowed the modest top-line beat, prompting traders to focus on the likely implications for margins and bottom-line performance as the travel market normalizes from its recent rapid expansion.
International activity continued to be a strong growth driver in Q1. Gross bookings on Trip.com’s global platform rose roughly 65% year-over-year, and inbound travel bookings surged by about 90% compared with the prior year. Nevertheless, management cautioned that overall net revenue growth is expected to decelerate to the 3%–8% range in the second quarter of 2026, which the company said implies pressure on margins and profit as prior rapid expansion moderates.
The broader U.S. equity market provided little support for the stock, with both the S&P 500 and Nasdaq edging lower on the session. No specific macro catalyst from Hong Kong or mainland China was identified in the company’s report as a direct driver of the move.
Market reaction reflected the confluence of three factors: a sizable year-over-year decline in reported profit, a miss on consensus EPS, and a much slower revenue growth guide for Q2. The quarter therefore presented a mixed picture - a revenue beat accompanied by weaker-than-expected profitability - and investors appeared to prioritize earnings quality amid a slowing revenue trajectory.
Intraday, Trip.com shares hit their lowest level since August 2024. The selloff suggests the market is revaluing the near-term earnings trajectory of the company in light of rising operating costs and a travel demand environment transitioning from rapid recovery to normalization.
Context and implications
The report underlines the tension between strong demand signals in certain international travel metrics and the pressure exerted on company-level profits as growth moderates. While Trip.com’s international business registered robust booking growth, the firm’s conservative Q2 outlook indicates management expects that overall revenue momentum will slow materially from the first-quarter pace.
Investors will likely watch upcoming quarterly commentary and cost dynamics closely to assess whether margin compression is transitory or more sustained as travel demand stabilizes.