TOPSPORTS(HK:06110) Ge Long Hui·2025-10-25 20:03Core Insights - The company experienced a 5.8% year-on-year decline in revenue for the first half of fiscal year 2026, totaling 12.3 billion RMB, primarily due to fluctuations in consumer demand for sports products and offline foot traffic [1] - Despite operational pressures, the company managed to maintain a gross margin of 41.0%, only slightly down by 0.1 percentage points year-on-year, aided by increased contributions from retail business and brand support [1] - The management has maintained guidance for net profit to remain flat year-on-year, with an improvement in net profit margin, while recent sales trends are expected to mirror those of the second quarter [1] Brand Performance and Strategy - The main brand saw a year-on-year decline of 4.8%, outperforming other brands which dropped by 12.2%, indicating resilience in the core brand performance [2] - The company is actively collaborating with main brands to enhance online and offline channel management and improve overall discount levels [2] - The company plans to deepen its focus on running and outdoor segments, developing new brands such as norda, soar, Ciele, and Norrna [2] Retail Transformation - The company continues to adjust its store structure and improve quality, with a net reduction of 332 direct-operated stores to 4,688 as of August 2025, alongside a 14.1% decrease in total sales area [2] - Despite the decline in offline foot traffic, the company reported double-digit growth in online retail business, exploring a multi-scenario operational model combining offline stores and online presence [2] - The management is implementing stricter standards for new and renovated stores, focusing on larger store sizes with more restrained renovation investments [2]