TOPSPORTS(HK:06110)2024-12-16 10:30Financial Data and Key Metrics Changes - The company's pretax sales revenue, including wholesale and retail, declined by a mid-single digit percentage year-over-year [3] - The gross margin for directly operated stores decreased by 4.4% year-over-year and 2.1% compared to August [6] - The company expects full-year profit to decline by 35% to 45% based on market expectations [25][46] Business Line Data and Key Metrics Changes - Retail performance was slightly better than wholesale, with online channels driving overall retail sales [3][4] - Direct-to-consumer online sales accounted for approximately 40% of total direct retail sales, showing a year-over-year increase [4] - Same-store traffic showed slight improvement compared to the first half of the year, but overall performance remained negative [5][17] Market Data and Key Metrics Changes - The company noted that foot traffic in offline channels weakened during the quarter, although there was some improvement compared to H1 [5][17] - The average store size continued to show year-over-year growth, despite a high single-digit decline in total same-store sales [7] Company Strategy and Development Direction - The company is strategically prioritizing inventory management and plans to utilize various promotional activities to improve inventory positions [2][3] - There is a focus on omni-channel operation efficiency, including precision store openings, renovations, and closures [7] - The company aims to collaborate with brand partners to achieve planned inventory improvements by the end of the year [5][66] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the offline retail network, believing that opportunities still exist despite current pressures [17][19] - The company remains committed to inventory optimization and expects to see improvements by the end of the fiscal year [45][66] - Management highlighted strong commitments from brand partners to the China market and the intention to strengthen collaborations [67] Other Important Information - The company capitalized on major online shopping festivals, resulting in double-digit worldwide growth in overall online sales [4] - The company is taking a proactive approach to store closures, particularly for underperforming locations [6][19] Q&A Session Summary Question: Inquiry about NACI's performance and market outlook - Management discussed recent communications with NACI's new global CEO, emphasizing the importance of the China market and potential synergies in product offerings [12][13] Question: Future offline retail network considerations - Management acknowledged pressures in the offline retail network but maintained a positive outlook, emphasizing the need for omni-channel operations [17][19] Question: Clarification on sales performance and profit guidance - Management confirmed that while Q3 performance was better than expected, they still anticipate a decline in profits for the full year [25][26] Question: Discount rates and inventory management - Management explained that discount rates have deepened due to inventory clearance efforts and increased online sales, but they are optimistic about inventory management [29][30] Question: E-commerce performance and strategies - Management highlighted the growth of online sales, particularly through live streaming and private channels, and emphasized the importance of resource allocation to online sales [33][35] Question: Store rental fees and brand support - Management indicated that store rental fees will depend on negotiations with property management companies and noted strong brand support for the China market [40][42] Question: Inventory synchronization with NACI - Management outlined strategies for inventory control and collaboration with NACI to optimize inventory levels [61][63]