Summary of China Property Monthly Tracker Industry Overview - The report focuses on the **Chinese property market**, highlighting significant declines in various metrics such as average selling prices (ASP), primary sales, new starts, and completions in November 2025 compared to previous years. Key Market Indicators - **Primary Sales**: - Volume declined by **17%** year-over-year (yoy) - Value declined by **25%** yoy, which was largely in line with expectations [2][11] - **New Starts**: - Fell sharply by **28%** yoy, marking the second consecutive month of decline [11] - **Completions**: - Declined by **25%** yoy, undershooting estimates [11] - **Fixed Asset Investment (FAI)**: - Reached its lowest level since 2012, declining by **30%** yoy [2][11] - **Secondary Transaction Volumes**: - Decreased by **24%** yoy [2][11] Price Trends - **Average Selling Prices (ASP)**: - Nationwide ASP declined by **9.5%** yoy in November [21] - Primary market ASP showed a slight decline of **0.4%** month-over-month (mom), while secondary market ASP declined by **0.7%** mom [11][28] Developer Activity - Developers' land acquisition spending moderated to **21%** of contract sales in November, with an average project-level gross profit margin (GPM) of **25%** [12][71] - The land market showed signs of weakness, with land sales volume and value declining by **27%** and **37%** yoy, respectively [35] Future Expectations - For December 2025, expectations include: - Continued price weakness and a **low-teens to low-twenties %** yoy decline in sales volume and value [3][13] - A potential positive yoy for completions, but a steeper decline in new starts [3][13] - Secondary transaction volumes expected to decline by **high-twenties %** yoy [3][13] Policy and Market Sentiment - Key areas to watch include: - Potential large-scale mortgage interest subsidies and commercial mortgage rate cuts [4][8] - Removal of housing purchase restrictions in core districts of Tier-1 cities [4][8] - Signs of rent stabilization in high-tier cities [4][8] - The overall demand score for the property market was **37 out of 100**, indicating a challenging environment for developers and homebuyers [53][55] Developer Liquidity - Developers are facing a funding gap estimated at **Rmb3.2 trillion** for 2025, with liquidity remaining tight [54][57] - New funding sources for developers increased by **21%** mom and **29%** yoy in November, indicating some recovery in financing [63] Conclusion - The Chinese property market is experiencing significant challenges, with declining sales, prices, and construction activity. Developers are under pressure due to liquidity issues and a challenging market environment. Future policy measures and market sentiment will be crucial in determining the trajectory of the market moving forward.

Financial Data and Key Metrics Changes - The company reported Q3 EPS of $0.53 and net sales of $297.2 million, both exceeding consensus expectations [3] - Gross profit margin expanded by 160 basis points to 37.6%, driven by disciplined pricing and a shift towards higher-income customers [4][17] - Net income for Q3 was $14.6 million, down from $19.2 million year-over-year, primarily due to re-banner investments impacting EPS by $0.22 [18] Business Line Data and Key Metrics Changes - Shoe Station net sales grew by 5.3%, while Shoe Carnival net sales declined by 5.2%, reflecting a significant performance gap of 10.5 percentage points [5][15] - Athletics represented 51% of total sales in Q3, with low single-digit growth overall, while non-athletic categories saw a mid-single-digit comp decline [4][16] - Shoe Station's product margins expanded by 260 basis points, contrasting with Shoe Carnival's decline due to economic pressures on lower-income households [5][18] Market Data and Key Metrics Changes - The company is strategically shifting away from lower-income households, focusing on customers with median incomes of $60,000-$100,000 [5][9] - The competitive response in the lower-income segment is driving margins down across the industry, while Shoe Station is positioned to capture premium brand demand [5][9] Company Strategy and Development Direction - The company plans to consolidate to one brand, Shoe Station, to improve operational efficiency and capitalize on the stronger performance of this banner [8][9] - By the end of fiscal 2027, the company expects to achieve $20 million in annual cost savings and $100 million in working capital freed from inventory reduction [9][27] - The transition to Shoe Station is expected to restore comparable sales growth and expand EPS significantly by fiscal 2028 [12][27] Management's Comments on Operating Environment and Future Outlook - Management highlighted that fiscal 2026 will be an investment year, with expectations of continued pressure on sales in the first half, followed by a potential turnaround in the second half as Shoe Station becomes the dominant brand [22][23] - The company remains debt-free with over $100 million in cash, allowing it to fund its transformation without external financing [10][13] - Management expressed confidence in the long-term value creation potential of the one-banner strategy, emphasizing the shift in consumer preferences towards premium brands [29] Other Important Information - The company completed 101 store re-banners during fiscal 2025, with plans to reach 51% of its stores operating as Shoe Station by back-to-school 2026 [7][28] - The Rogan's acquisition is fully integrated into Shoe Station, and results will be reported under this banner starting in Q4 [20] Q&A Session Summary Question: What is the expected drag on earnings from re-bannering next year? - Management indicated that re-banner expenses for the next year are expected to be between $25 million and $30 million, with costs being front-loaded due to the conversion of approximately 70 stores [30][31] Question: How will the company manage inventory reductions? - The company plans to liquidate non-GoForward products aggressively and expects some margin pressure during this process [52][53] Question: What is the outlook for the boot business? - Management noted that while the boot season started slowly, there were double-digit increases in sales as inventory improved in October [35] Question: Will the company be able to elevate its product assortment at Shoe Station? - Management confirmed that there are ongoing discussions with premium brands to enhance the product assortment at Shoe Station [37] Question: What is the timeline for achieving the 80% re-bannering goal? - Management stated that the focus is on reaching the critical 51% threshold by summer 2026, with plans to exceed 90% by the end of fiscal 2028 [54]

Core Insights - The company reported a significant decline in revenues for the first half of 2025, with total revenues of €86.6 million, down 8.5% compared to the same period in 2024 [1][5][6] - The decline was particularly pronounced in the French market, where revenues fell by 17.4%, while international revenues saw a more moderate decrease of 1.3% [6][11] Revenue Breakdown - In France, revenues for H1 2025 were €35.1 million, down from €42.5 million in H1 2024, reflecting a 17.4% decline [5][8] - International revenues totaled €51.4 million in H1 2025, down from €52.4 million in H1 2024, marking a 1.3% decrease [5][11] - Q2 2025 revenues were €44.4 million, down 13.7% from €51.6 million in Q2 2024 [1][7] Market Performance - The spirits market in France continues to decline, with Q2 2025 sales down 23.8% compared to Q2 2024, largely due to distribution losses for the William Peel brand [6][8] - The On-Trade sector showed positive growth, with sales up 12.6% in H1 2025, indicating a divergence in performance between On-Trade and Off-Trade channels [6][10] - Internationally, the United States experienced a sharp revenue decline of 57.5% in Q2 2025, primarily due to inventory reductions by the importer [19][20] Strategic Responses - The company is implementing price adjustments to counteract rising costs of matured spirits and is focusing on maintaining constructive dialogue with Off-Trade chains to recover market positions [23][24] - Efforts are being made to diversify offerings through the development of Industrial Services and Agency Brands, which are showing growth potential [25][26] Outlook - The company anticipates continued challenges in the international wine and spirits market, with uncertainties regarding trade negotiations and potential increases in customs duties impacting profitability [22][26]

Financial Performance & Guidance - The company is initiating full-year 2025 guidance with an Adjusted EBITDA target of $45-$52 million and revenue target of $565-$585 million[9, 20] - FY 2024 adjusted revenue was approximately $563 million, compared to $579 million in FY 2023[11] - FY 2024 adjusted EBITDA was approximately $42 million, compared to $53 million in FY 2023[11] - The Adjusted EBITDA margin for FY 2024 was 75%, compared to 91% in FY 2023[11] - Q4 2024 revenue was approximately $169 million, compared to $172 million in Q4 2023[11] - Q4 2024 adjusted EBITDA was approximately $18 million, compared to $22 million in Q4 2023[11] - The Adjusted EBITDA margin for Q4 2024 was 106%, compared to 127% in Q4 2023[11] Debt & Inventory Management - The company paid down $22 million of debt in Q4 2024[9, 16] - Debt was reduced from $179 million in Q3 2024 to $156 million in Q4 2024[15] - Inventory decreased by approximately $47 million in Q4 2024 compared to Q3 2024, before inventory write-downs[9, 19] - Inventory was reduced from approximately $246 million in Q3 2024 to $199 million in Q4 2024, before inventory write down[18] Non-Recurring Charges - The company incurred $118 million of non-recurring charges in 2024, attributable to SIMPAS, goodwill impairment, transformation consultant expense, the write-down of slow-moving inventory, and the write-down of a previous investment[9]