Financial Performance - Overall revenue declined by 5.8% to RMB 12.3 billion, affected by weak consumer demand and air flight traffic fluctuations [4][6] - Retail business revenue declined by 3% worldwide, while wholesale business revenue decreased by 20.3% [4] - Gross profit margin declined by 0.1% to 41%, with total expenses decreasing by 5.5% [6][9] - Net profit declined by 6% on a worldwide basis, with a net profit rate of 6.4% [9][10] - Free cash flow was RMB 1.22 billion, representing 1.5 times the net profit for the same period [13][14] Business Line Performance - Core brand sales revenue decreased by 4.8% to RMB 10.8 billion, while other brand sales revenue declined by 12.2% to RMB 1.4 billion [4] - Online sales discounts were higher than offline, contributing to the increase in online channel sales but negatively impacting gross profit margin [5][6] - Employee headcount decreased by 16% worldwide, with total employee costs down by 5.2% [7] Market Data - The textile and apparel industry grew by 2.5%, slightly faster than the previous year, but the recovery pace was lower than the overall retail sales growth [15] - Consumer segmentation in the sports industry has become more diverse, with a shift towards specialized vertical interest communities [16] Company Strategy and Industry Competition - Topsports is committed to advancing its core strategy and adapting to market changes, focusing on omnichannel retail agility and operational efficiency [2][17] - The company aims to enhance its role within the industrial ecosystem by expanding brand partnerships and improving operational lean management [17][18] - Topsports is focusing on building a diversified user value system and enhancing user relationships through targeted marketing and omnichannel integration [26][27] Management Comments on Operating Environment and Future Outlook - The management acknowledges the challenging external environment but remains optimistic about achieving planned performance [2][3] - The company is committed to fulfilling its full-year guidelines and aims for net profit to remain flat in fiscal year 2026 [61] - Management emphasizes the importance of adapting to evolving consumer habits and enhancing digital intelligence capabilities [19][31] Other Important Information - The company has reduced capital expenditure by 36% and selling and distribution expenses ratio decreased by 0.2% [21] - Topsports is actively engaging in sustainability initiatives, including a used clothing recycling charity [23][24] Q&A Session Summary Question: Future of Nike in China and partnership strategies - Management acknowledges Nike's challenges in the Chinese market and is supportive of their initiatives to improve offline operations [41][42] Question: Sustainability of brand support and product orders - Management believes that as a key partner, Topsports will continue to receive strong support from brands despite market challenges [56][57] Question: Outlook for H2 and product breakdown from Nike - Management expects to fulfill full-year guidelines and maintains a healthy inventory level, with 70% to 80% of Nike products being new [62][61] Question: Development of Aptus project - Aptus is positioned as a social infrastructure for runners, focusing on community engagement and brand partnerships [63][64]

Financial Performance and Key Indicators - Overall revenue declined by 5.8% to RMB 12.3 billion, affected by weak consumer demand and flight traffic fluctuations [4] - Retail business revenue decreased by 3% year-over-year [4] - Wholesale business revenue declined by 20.3% [5] - Gross profit margin declined by only 0.1 percentage points to 41% despite deeper discounting [7] - Total expenses decreased by 5.5%, with expense ratio slightly increasing to 33.2% [7] - Net profit declined by 6% year-over-year, with net profit rate at 6.4% [11] Business Line Performance - Core brand sales revenue decreased by 4.8% to RMB 10.8 billion, while other brand sales revenue declined by 12.2% to RMB 1.4 billion [5] - Specialized vertical brands performed best, particularly in comprehensive sports and live sports categories [5] Market Data and Key Indicators - The textile and apparel industry grew by 2.5%, but the recovery pace was slower than the overall retail sales growth [20] - Consumer segmentation in the sports industry has become more diverse, with a shift towards specialized vertical interest communities [21] Company Strategy and Development Direction - The company is focused on refining its omni-channel retail agility and operational efficiency [2] - Plans to expand brand partnerships and enhance product R&D to capture segmented demand [22] - Emphasis on building a digital intelligence strategy to improve operational efficiency [23] Management Comments on Operating Environment and Future Outlook - The management remains optimistic about the second half of the fiscal year, aiming for flat net profit and improved net profit rate year-over-year [70] - The company acknowledges challenges in the market but is committed to fulfilling its performance guidelines [70] Other Important Information - Free cash flow was RMB 1.22 billion, representing 1.5 times the net profit for the same period [19] - The company maintains a robust cash generation capacity, with a dividend payout ratio consistent with the previous year [19] Q&A Session Summary Question: Future of Nike in China and partnership strategies - Management noted that Nike's recovery in China is slower than in other markets, and they are supportive of Nike's initiatives to reduce discounts and invest in offline channels [48][49] Question: Sustainability of brand support - Management believes that as a major partner, they will continue to receive strong support from brands, especially in challenging market conditions [65] Question: Outlook for H2 and next fiscal year - Management is committed to fulfilling full-year guidelines and expects net profit to be flat with an improved net profit rate year-over-year [70] Question: Product order breakdown and discount updates - Approximately 70% to 80% of Nike products are new, and the discount rate has stabilized [71][72] Question: Actos project and its future development - Actos is evolving into a community hub for running enthusiasts, emphasizing social interactions and brand collaborations [75][76]