Core Viewpoint - The management of the company maintains guidance for full-year net profit to remain flat year-on-year, with an improvement in net profit margin, while recent sales trends are similar to those in the second quarter, although discounts have deepened year-on-year [1] Financial Performance - For the first half of the 2026 fiscal year, the company's revenue was 12.3 billion RMB, a year-on-year decrease of 5.8%, primarily due to fluctuations in consumer demand for sports products and offline foot traffic [1] - The gross profit margin slightly decreased by 0.1 percentage points to 41.0%, impacted by discount changes and an increase in online revenue share, although the contribution from retail business and support from brand partners partially offset negative effects [1] - The operating expense ratio increased by 0.1 percentage points to 33.2%, benefiting from rental structure and operational team optimization; the net profit margin decreased by 0.3 percentage points to 6.4%, with net profit declining by 9.8% to 790 million RMB, roughly in line with expectations [1] Brand Performance - By brand, the main brand and other brands saw year-on-year declines of 4.8% and 12.2% respectively, with the main brand performing better than other brands and the overall performance [2] - The company is actively collaborating with the main brand to improve online and offline channel management and enhance overall discount levels [2] Store Management and Strategy - The company continues to adjust its store structure and improve quality, with a net decrease of 332 directly operated stores to 4,688 as of August 2025, indicating a downward trend; total sales area decreased by 14.1%, but average store area increased by 6.5% year-on-year [2] - The management noted ongoing pressure on offline foot traffic, with a double-digit decline in same-store traffic during the period; the company is implementing stricter standards for new and renovated stores under the "selection + optimization" principle [2] - Online retail business experienced double-digit growth year-on-year, with the company exploring a diversified operational model of "1 (offline store) + N (online multi-scenario layout)" [2]

Group 1 - The company is focusing on cost reduction and efficiency improvement through comprehensive budget management and internal initiatives to lower expense ratios and enhance profitability [1] - In the first half of the year, the company actively expanded its regional market presence and strengthened brand promotion and consumer engagement despite industry challenges [1] - The management indicated that the company has adopted a direct sales model without intermediaries, targeting high-end private banquets and gift markets to stabilize prices and promote healthy channel development [1] Group 2 - The company has enhanced its online presence by establishing official flagship stores on platforms like JD, Tmall, Douyin, and Pinduoduo, while also building a store matrix through partnerships [2] - The company is embracing instant retail channels and has partnered with Yima to effectively integrate online and offline resources for deeper operational synergy [2]