Financial Data and Key Metrics Changes - For Q2 2025, comparable sales decreased by 1.9%, showing a nearly two percentage point improvement from Q1 [32] - Net sales were down 0.9% year-over-year, which was nearly two percentage points better than Q1 performance [40] - GAAP and adjusted EPS for Q2 were $2.05, down from $2.57 a year ago, primarily due to inventory adjustment and tariff-related costs [44] Business Line Data and Key Metrics Changes - Digital channel comparable sales grew by 4.3%, with significant strength in same-day delivery, which increased by over 25% [33] - The Fun 101 initiative led to over 5% growth in hardlines, marking the strongest quarterly comp in this category since 2021 [34] - Trading card sales increased nearly 70% year-to-date, positioning the company as a top market share player in that category [34] Market Data and Key Metrics Changes - The company gained or held market share in 14 out of 35 subcategories tracked so far this year [41] - The food and beverage categories saw slight year-over-year growth, driven by new floral offerings and trending flavors [35] Company Strategy and Development Direction - The new CEO, Michael Fidelke, emphasized the need to reestablish merchandising authority and improve guest experience [18][19] - The company plans to leverage technology to enhance speed and efficiency across operations [23] - A focus on style and design will be central to the company's strategy moving forward [67] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that results over the past few years have fallen short of expectations and emphasized the urgency to improve performance [7][12] - The leadership team is committed to returning the company to growth and improving the shopping experience for guests [53][55] - The company expects to navigate the current tariff environment and is optimistic about ending the year in a healthy position [11] Other Important Information - The company announced a succession plan with Michael Fidelke becoming the next CEO at the start of the 2026 fiscal year [5][6] - The company is investing in technology and process improvements to streamline operations and enhance the guest experience [49] Q&A Session Summary Question: What price increases were taken during the second quarter due to tariffs? - Management indicated that they are working hard to mitigate tariff impacts and will take price increases as a last resort, focusing on maintaining competitive pricing [58][59] Question: How does the succession plan bring about change to improve business trajectory? - The new CEO highlighted the importance of leveraging his extensive experience with the company to focus on style and design as key growth drivers [66][67] Question: What investments will be necessary to close the performance gap with peers? - The company plans to continue investing in high-return projects, including new store openings and technology enhancements [72][75]

Group 1 - In July, the total retail sales of consumer goods reached 38,780 billion yuan, with a year-on-year growth of 3.7% [1][6] - Excluding automobiles, the retail sales of consumer goods amounted to 34,931 billion yuan, growing by 4.3% [1][6] - From January to July, the total retail sales of consumer goods were 284,238 billion yuan, with a growth rate of 4.8% [1][6] Group 2 - Urban retail sales in July were 33,620 billion yuan, reflecting a year-on-year increase of 3.6%, while rural retail sales reached 5,160 billion yuan, growing by 3.9% [3] - For the first seven months, urban retail sales totaled 246,669 billion yuan, with a growth of 4.8%, and rural retail sales were 37,569 billion yuan, increasing by 4.7% [3] Group 3 - In July, the retail sales of goods were 34,276 billion yuan, with a year-on-year growth of 4.0%, while catering revenue was 4,504 billion yuan, growing by 1.1% [3][6] - From January to July, the retail sales of goods reached 252,254 billion yuan, with a growth of 4.9%, and catering revenue was 31,984 billion yuan, increasing by 3.8% [3] Group 4 - For the first seven months, retail sales in convenience stores, supermarkets, department stores, specialty stores, and brand exclusive stores grew by 7.0%, 5.2%, 1.1%, 5.8%, and 1.9% respectively [4] - The national online retail sales reached 86,835 billion yuan, with a year-on-year growth of 9.2%, and the physical goods online retail sales were 70,790 billion yuan, growing by 6.3% [4] Group 5 - The newly opened Apple Store in Shenzhen is the third in the city and the 58th in Greater China, completing the layout along the east-west axis of Shenzhen [11] - The first city duty-free store in Shenzhen is set to open on August 26, featuring a diverse range of products including beauty, watches, and high-end liquor [13] Group 6 - The local fashion brand Lemanism is opening its first store in Nanchang, focusing on a comfortable and sunny shopping experience for the youth [25] - The brand BornTooth is expanding with its fourth store in Shanghai, emphasizing natural pet care products [27] Group 7 - The high-end dining brand PIZZERIA from Pizza Hut has opened its first store in South China, targeting young consumers with a focus on aesthetic dining experiences [30] - JD's first outlet in Nanjing has opened, featuring over 70 brands and a unique shopping experience [31] Group 8 - The sports brand 361 Degrees reported a revenue of 5.705 billion yuan for the first half of 2025, with a year-on-year growth of 11% [38] - Lilang Group's revenue for the first half of the year was 1.727 billion yuan, reflecting a growth of 7.9% [41] Group 9 - The company Bubu Gao reported a net profit of 201 million yuan for the first half of 2025, marking a significant turnaround [42] - The company has improved its operational quality by closing underperforming stores and focusing on high-potential locations [43]