Financial Data and Key Metrics Changes - The company reported net sales of $266 million for Q1, down from $279.8 million in the prior year, with comparable store sales declining by 3.5% [20][24] - Gross profit decreased to $101.4 million from $115.4 million, with gross margin declining by 320 basis points to 38.1% due to planned promotional initiatives [24][25] - Adjusted EBITDA was $27.1 million, representing a 10.2% margin, down from $38.2 million and 13.7% in the previous year [27] - Net income for the quarter was $5.9 million, or $0.06 per share, compared to $12.2 million, or $0.12 per share, in the prior year [26] Business Line Data and Key Metrics Changes - The performance of sub-brands such as Festi, Belle Isle, Nightfall, and Retro Chic exceeded expectations, achieving sales 2 to 6 times higher than planned [7] - Online sales demand is approaching 70% of total sales, with expectations to reach 75% by 2026 [9] - The company plans to increase the delivery frequency of existing sub-brands from 6-8 times a year to 12 times annually, aiming for sub-brands to represent up to 30% of the portfolio by 2026 [8] Market Data and Key Metrics Changes - The company closed 35 stores in 2024 and plans to close approximately 180 stores in 2025, with 60 stores targeted for closure in the first half of the year [10][29] - The closures are expected to have a negligible impact on net sales, as the company retains approximately 60% of customers post-closure [10][29] Company Strategy and Development Direction - The company is focusing on enhancing product assortment, driving customer growth, and executing a store optimization plan [6] - A strategic shift towards online sales is evident, with plans to optimize the retail footprint to align with customer preferences for online shopping [12][60] - The company is diversifying sourcing to reduce exposure to China, with current exposure in the low single digits [13] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior remains price and value-conscious, but there is a positive response to new product offerings [20] - The company expects to mitigate approximately $20 million of tariff impact through expense reductions and strategic marketing investments [32] - The outlook for fiscal 2025 includes a revenue impact of approximately $40 million to $45 million due to the pause in the footwear business [31] Other Important Information - The company ended the quarter with $23.7 million in cash and access to $117.3 million in additional liquidity [21] - Inventory totaled $149.6 million, a 3.3% increase year-over-year, with expectations for a decrease in year-end comparable store inventory [28] Q&A Session Summary Question: Could you talk about the cadence of newness for the second half? - The company plans to launch a new sub-brand, Lovesick, in August and Studio Luxe in September, with existing brands being delivered monthly by the end of the year [38] Question: What trends are being seen with new customers following their initial sub-brand purchase? - Positive movement in customer acquisition and reactivation has been observed, with a high attachment rate of 90% for sub-brand purchasers adding core products to their baskets [42][44] Question: What is the reason for the sizable sales growth deceleration in Q2? - The pause in the shoe business, primarily sourced from China, is expected to impact sales by $40 million to $45 million for the year [48][49] Question: How does the promotional strategy coexist with new product launches? - The company will continue its typical promotional cadence, responding to consumer value orientation with promotional events [56] Question: What is behind the acceleration in store closures? - The preference for online shopping has led to a decision to close underperforming stores while reallocating resources to digital investments [60][61]

Core Viewpoint - The company's same-store sales are under pressure in 2024 due to external factors such as subdued dining trends and consumer spending, as well as internal adjustments [1][2] Group 1: Same-Store Sales Performance - In 2024, same-store revenue for brands such as Jiumaojiu, Taier, and Songhuoguo is expected to decline by -13%, -19%, and -32% respectively [1] - Jiumaojiu is less affected by the economic downturn due to its lower average transaction value of 55 yuan compared to Taier at 71 yuan and Songhuoguo at 103 yuan [1] Group 2: Operational Adjustments - The company is actively making adjustments to improve operations, including optimizing store models and menu structures [1][2] - Store renovations aim to create a warmer and more stylish environment suitable for family gatherings [1] - The menu is being updated to replace non-core dishes and introduce fresh fish, on-site slaughter, and specialty snacks [1] Group 3: Profitability and Financial Outlook - The company has slowed its expansion strategy in 2024, focusing on store upgrades and closures, which may enhance profitability [2] - The net profit attributable to the parent company for 2024 is projected at 56 million yuan, with core operating profit at 252 million yuan [2] - Profit recovery is anticipated in 2025, with net profits expected to reach 135 million yuan, 164 million yuan, and 203 million yuan for 2025-2027, representing year-on-year growth rates of 142.37%, 20.97%, and 24.05% respectively [2] Group 4: Supply Chain Development - The company is implementing supply chain improvements, with a central kitchen in Nansha, Guangzhou expected to be operational in 2025 [2] - Additional supply chain developments are planned for Shanghai and Chongqing in 2026-2027, which will support accelerated expansion outside the province [2] Group 5: Investment Rating - The company is viewed as being at the bottom of its fundamental performance, with positive adjustments and a potential turning point on the horizon [2] - Earnings per share (EPS) forecasts for 2025-2027 are 0.10, 0.12, and 0.15 yuan, with corresponding price-to-earnings ratios of 23.39x, 19.33x, and 15.59x [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [5][7]. Core Insights - The company experienced a significant decline in revenue and net profit in Q1 2025, with revenue down 47.28% year-on-year to 2.673 billion yuan and net profit down 26.12% to 252 million yuan [2]. - The overall gross margin improved by 10.64 percentage points in Q1 2025, reaching 26.21%, while the expense ratio increased by 4.94 percentage points to 10.63% [3]. - The company is optimizing its store network and enhancing its product matrix, with a total of 4,831 stores as of Q1 2025, including 4,435 franchise stores and 396 self-operated stores [4]. Financial Performance Summary - In 2024, the company reported a revenue of 13.891 billion yuan, a decrease of 14.73% year-on-year, and a net profit of 1.010 billion yuan, down 23.25% [2][6]. - The forecast for 2025 and 2026 net profit has been revised down by 9% to 1.044 billion yuan and 1.115 billion yuan, respectively, with a new estimate for 2027 at 1.173 billion yuan [5][6]. - The company’s revenue growth rate is projected to be 1.95% in 2025 and 6.34% in 2026, with a slight decline in net profit growth rate expected [6][12]. Product and Market Strategy - The company has launched a new sub-brand "Zhuan Zhu Ge," focusing on cultural and creative jewelry products, enhancing its product offerings [4]. - The product matrix includes various themes such as national treasures, international art IPs, and cultural heritage, aimed at attracting diverse consumer preferences [4].

Core Viewpoint - The recent issue of "reverse rounding" at Yonghui Supermarket has raised significant consumer concerns, leading to a company-wide policy change to ensure fair cash transactions [1][3]. Group 1: Incident Overview - Yonghui Supermarket acknowledged the existence of "reverse rounding" practices in several non-adjusted stores across cities like Chongqing, Hebei, and Beijing, confirming customer complaints about the Chongqing Jinyuan Times store [1]. - The company has implemented a new policy since April 29, mandating that cash payments round down to ensure customers do not pay more than the marked price [1]. Group 2: Consumer Complaints - A specific incident involved a customer, Mr. Liu, who was charged 8 yuan for a product priced at 7.96 yuan due to the store's rounding policy, which was not disclosed beforehand [1][2]. - Systematic occurrences of this issue were found in various Yonghui stores in Chongqing, where customers were charged higher amounts than the listed prices for items with non-integer pricing [2]. Group 3: Legal and Ethical Implications - The supermarket's practice of "reverse rounding" has been deemed potentially illegal, as it violates consumer rights by not informing customers of the pricing method used [3]. - The lack of transparency in pricing practices reflects a broader issue of trust and legal awareness among some retailers, undermining consumer rights [3]. Group 4: Financial Performance - Yonghui Supermarket reported a significant decline in financial performance, with a 14.07% decrease in revenue to 67.574 billion yuan for the year 2024, and a net loss of 1.465 billion yuan, which is an increase in losses compared to the previous year [4]. - For the first quarter of 2025, the company experienced a 19.32% drop in revenue to 17.479 billion yuan and a 79.96% decrease in net profit, attributed to store optimization and strategic shifts [4].

Core Viewpoint - The company reported its 2024 annual results and Q1 2025 results, showing revenue growth but a decline in net profit, indicating a mixed performance in the current market environment [1] Group 1: Financial Performance - In 2024, the company achieved revenue of 18.256 billion yuan, a year-on-year increase of 2.77%, while net profit attributable to shareholders was 132 million yuan, a decrease of 3.26% [1] - In Q4 2024, revenue reached 4.129 billion yuan, up 6.31% year-on-year, with a net profit of -56 million yuan, an improvement from -72 million yuan in the same period last year [1] - For Q1 2025, revenue was 4.941 billion yuan, down 4.77% year-on-year, and net profit was 142 million yuan, a decrease of 3.59% [1] Group 2: Store Expansion and Efficiency - The company opened 140 new stores in 2024, bringing the total to 1,100, with 957 direct-operated and 143 franchised stores [2] - In Q1 2025, the company opened 8 direct-operated and 7 franchised stores while closing 20 underperforming stores, resulting in a total of 1,095 stores at the end of the quarter [2] - The company is focusing on optimizing store locations and improving operational efficiency by closing unprofitable stores [2] Group 3: Online Sales and Supply Chain - Online sales grew by 13.2% in 2024, with a total of 3.31 million customer visits to stores, achieving a conversion rate of 40% [3] - By the end of 2024, online sales accounted for 7.16% of total sales, reflecting the company's efforts to enhance its online presence [3] - The company is strengthening its supply chain strategy and increasing the proportion of private label and customized products to 13.63% [3] Group 4: Profitability and Cost Management - In Q1 2025, the gross profit margins for various store formats were 20.82% for comprehensive supermarkets, 19.41% for community fresh food supermarkets, 19.72% for rural supermarkets, and 22.62% for other formats, showing an increase compared to the previous year [4] - The company's expense ratio for the full year 2024 and Q1 2025 was 21.97% and 19.83%, respectively, indicating a slight decrease year-on-year [4] - The net profit margin for the full year 2024 and Q1 2025 was 2.87% and 0.72%, respectively, reflecting a stable performance despite challenges [4] Group 5: Future Outlook - The company aims to transition from scale retail to quality retail, focusing on product strength and enhancing supply chain efficiency [4] - The net profit forecasts for 2025 and 2026 have been adjusted to 201 million yuan and 243 million yuan, respectively, with a new forecast for 2027 set at 272 million yuan [4]

Core Insights - The company reported a revenue of 26.497 billion yuan in 2024, an increase of 8.0% year-on-year, but a decline in net profit attributable to shareholders by 21.6% to 915 million yuan [1] - In Q1 2025, the company achieved a revenue of 6.956 billion yuan, a 3.0% increase year-on-year, with a net profit attributable to shareholders of 460 million yuan, up 15.5% [1] Operational Analysis - The company opened 907 self-built stores, acquired 420 stores, and added 1,885 franchise stores in 2024, while closing 733 stores, indicating a strategic optimization of its store network during an industry adjustment period [2] - In Q1 2025, the company net added 69 stores, including 54 new stores, 0 acquisitions, and 189 franchise stores, while closing 174 stores, bringing the total to 16,622 stores [2] - The fastest-growing segment in Q1 2025 was traditional Chinese and Western medicine, generating approximately 5.32 billion yuan in revenue, a year-on-year increase of 5.8% [2] - The company is focusing on expanding its presence in provincial markets, achieving a revenue growth of 10.7% in regions outside its primary market [2] Profit Forecast, Valuation, and Rating - Following the adjustment period in 2024, the company is expected to return to a normal growth trajectory, with projected net profits of 1.1 billion yuan, 1.32 billion yuan, and 1.52 billion yuan for 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 20.1%, 19.8%, and 15.3% [3] - The estimated earnings per share (EPS) for 2025, 2026, and 2027 are projected to be 0.96 yuan, 1.16 yuan, and 1.33 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 17, 15, and 13 times [3]