TOPSPORTS(HK:06110) Ge Long Hui·2025-10-24 04:01Core Insights - The company reported a decline in revenue and net profit for the first half of the 2026 fiscal year, with revenue at 12.3 billion RMB, down 5.8% year-on-year, and net profit at 790 million RMB, down 9.7% year-on-year [1][2] Financial Performance - Earnings per share (EPS) for the period was 0.13 RMB, with a proposed interim dividend of 0.13 RMB per share, resulting in a payout ratio of 102.2% [1] - The gross profit margin decreased by 0.1 percentage points to 41.0%, while the operating profit margin fell by 0.5 percentage points to 8.1%, and the net profit margin declined by 0.3 percentage points to 6.4% [1][2] Sales and Revenue Breakdown - Revenue from the main brands (Nike and Adidas) and retail business decreased by 4.8% and 3.0% respectively, with total store count decreasing by 332 [1] - Revenue contributions by brand for the first half of 2026 were 87.9% from main brands, 11.5% from other brands, 0.5% from joint venture income, and 0.1% from esports, with respective year-on-year changes of -4.8%, -12.2%, -15.2%, and -39.7% [1] Channel Performance - Revenue by channel showed retail and wholesale income down by 3.0% and 20.3% respectively, with retail accounting for 86.2% of total revenue [2] - The total number of stores decreased to 4,688, with a total sales area down 14.1% year-on-year, while the average sales area per store increased by 6.5% [2] Inventory and Cash Flow - Inventory as of August 2025 decreased by 2.8% quarter-on-quarter to 5.83 billion RMB, down 4.7% year-on-year, with inventory turnover days increasing to 150 days [3] - Operating net cash flow for the first half of 2026 decreased by 48.2% to 1.35 billion RMB [3] Strategic Initiatives - The company is focusing on enhancing its retail operations and optimizing its offline store network while expanding its online presence [3] - New partnerships have been established with running brands and outdoor brands, and a new running concept store has been opened [3] Profit Forecast Adjustments - Due to uncertainties in terminal demand, the company has slightly lowered its profit forecasts for fiscal years 2026 to 2028, with net profit estimates reduced by 5% for 2026 and 6% for 2028 [3]