Core Viewpoint - The financial performance of Maoye Commercial (600828.SH) in Q1 2025 shows significant declines in both revenue and net profit, raising concerns about the recovery prospects of the traditional retail industry [1][2]. Financial Performance - The company's revenue for Q1 2025 was 641 million yuan, a year-on-year decrease of 22.12% - The net profit attributable to shareholders was 14.34 million yuan, down 75.46% year-on-year - The net profit excluding non-recurring items was 15.73 million yuan, a decline of 71.35% year-on-year [1][2]. Cost Management - Despite the decline in revenue and profit, the gross margin increased to 60.76%, up 1.09% year-on-year - The net profit margin, however, fell to 2.07%, a decrease of 71.16% year-on-year - Total selling, administrative, and financial expenses amounted to 342 million yuan, accounting for 53.36% of revenue, compared to 47.02% in the same period last year [2]. Online Business Strategy - In response to the challenges posed by online retail, the company has intensified its online presence through platforms like Maolehui APP and WeChat Mini Programs - Online sales in 2024 reached 19 million yuan, representing 10.06% of total department store sales [2][3]. Acquisition Issues - The acquisition of Shenzhen Youyigou E-commerce Co., Ltd. aimed to integrate online and offline channels but has not achieved its intended goals - The acquired company failed to meet performance commitments, with a cumulative actual net profit of 139.74 million yuan from 2018 to 2020, falling short of the promised 150 million yuan - The company faced regulatory scrutiny due to inaccurate financial reporting related to this acquisition, resulting in a warning from the Sichuan Securities Regulatory Bureau [3].