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ATRenew Boosts Revenue, Profit On Aggressive Offline Expansion

The company's revenue grew 32% in the second quarter, its fastest rate in two years, as it stepped up an aggressive expansion of its offline store network

Key Takeaways:

ATRenew's revenue grew at its fastest pace in two years and its profit approached a record high in the second quarter

The recycling company's stock now trades at a three-and-a-half-year high, following a 57% rally since the start of the year

When it comes to recycled goods, there's nothing like being able to touch and feel what you're buying.

That's one of the key lessons that ATRenew Inc. (NYSE:RERE) has learned in the 14 years since its inception, and is a central focus as it works to build a name as China's top recycling brand. The company showed it was making strides in that direction last week by reporting its fastest revenue growth in two years during the second quarter, as it also posted a fourth consecutive quarter of GAAP operational profitability.

ATRenew also unveiled a major new program to return its growing profits to shareholders, which companies typically do as both share buybacks and by paying dividends. ATRenew has engaged in share buybacks for a while now. But the new program's unveiling, including its ambitious goal of returning no less than 60% of the company's adjusted net profits to shareholders, hints that it could also offer dividends in the not-too-distant future.

While e-commerce works well for new products coming straight from the manufacturer, consumers are more cautious about buying second-hand goods. ATRenew has tackled that issue by putting its name and reputation behind the products it sells, including smartphones, PCs and a growing number of other recycled goods like luxury items, gold and vintage liquors.

But it has also come to realize that no matter how much reassurance they receive, people like to personally inspect second-hand goods before making a purchase. To facilitate that, the company has been rapidly building up a network of offline ...