Core Viewpoint - The company reported a decline in revenue and net profit for FY2026H1, with revenue at 12.299 billion yuan, net profit at 789 million yuan, and operating cash flow at 1.355 billion yuan, reflecting year-on-year decreases of 5.8%, 9.7%, and 48.2% respectively, primarily due to a slight decrease in gross margin, increased management expense ratio, and a decline in other income [1][2] Financial Performance - Revenue and net profit for FY2026H1 were 12.299 billion yuan and 789 million yuan, respectively, with a year-on-year decline of 5.8% and 9.7% [1] - Operating cash flow decreased by 48.2% to 1.355 billion yuan, attributed to an increase in accounts receivable and a decrease in accounts payable [1] - The proposed cash dividend per share is 0.13 yuan, with a payout ratio of 102% and a dividend yield of 8.52% [1] Business Segments - Retail and wholesale revenues were 10.925 billion yuan and 2.035 billion yuan, showing year-on-year declines of 3% and 20% respectively, with a more significant drop in wholesale due to inventory reduction and decreased orders [1] - Main brand revenue decreased by 4.8% to 10.812 billion yuan, while other brands, joint venture fees, and esports revenue saw declines of 12.2%, 15.2%, and 39.7% respectively [1] - The number of stores decreased by 19.4% to 4,688, with a net reduction of 332 stores, while the average sales area per store increased by 6.5% [1] Online and Offline Strategy - The company has adopted a comprehensive online strategy combining platform e-commerce, content e-commerce, and private domain operations, achieving double-digit growth in online retail sales [1] - The company is enhancing its store experience by integrating functional services and social attributes, with initiatives like pop-up stores and collaborations with major brands [1] - The company has opened its first running specialty store, ektos, in Shanghai, focusing on runner needs to increase customer loyalty [1] Inventory and Cash Flow Management - Inventory decreased by 4.7% to 5.83 billion yuan, with inventory turnover days increasing by 2 days to 150 days [2] - Accounts receivable decreased by 1.5% to 930 million yuan, with turnover days decreasing by 4 days to 13 days [2] - Accounts payable decreased significantly by 64% to 300 million yuan, with turnover days down by 7 days to 8 days [2] Future Outlook - Short-term improvements in inventory and a comprehensive online strategy are expected to boost online revenue and compensate for offline traffic declines [2] - Mid-term prospects include potential growth from partnerships with high-end running and outdoor brands [2] - Long-term outlook remains positive due to strong channel partnerships, ongoing digital transformation, and high dividend attributes [2]