2025-10-23 02:00Financial Performance and Key Indicators - Overall revenue declined by 5.8% to RMB 12.3 billion, with retail business down by 3% and wholesale business down by 20.3% [3][5] - Gross profit margin decreased by 0.1% to 41%, while total expenses decreased by 5.5%, leading to a slight increase in expense ratio to 33.2% [5][9] - Net profit declined by 6% on a worldwide basis, with a net profit rate of 6.4%, reflecting a slight reduction of 0.3% [9][13] 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, primarily affected by lifestyle sports brands [3][5] - Online sales discounts have increased, contributing to a rise in online channel sales but negatively impacting overall gross profit margin [4][5] Market Data and Key Indicators - The textile and apparel industry grew by 2.5%, slightly faster than the previous year, but the recovery pace was lower than the total social consumer goods retail sales growth [15] - Consumer segmentation in the sports industry has become more diverse, with a shift towards specialized vertical interest communities [16][30] Company Strategy and Development Direction - Topsports is committed to advancing its core strategy, 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 optimizing operational capacities [2][17] - Future strategies include reinforcing expansion into emerging scenarios and high-potential areas, with a focus on product R&D and operational lean management [17][34] Management Comments on Operating Environment and Future Outlook - The management acknowledges the challenging external environment but remains optimistic about achieving planned performance [2][34] - The company is focused on maintaining a flat net profit for fiscal year 2026, with an improved net profit rate [49] - Management emphasizes the importance of adapting to changing consumer behaviors and market dynamics [30][34] Other Important Information - Free cash flow was RMB 1.22 billion, with a dividend payout of RMB 868 million, representing 34% of the beginning cash [13][15] - The company has reduced its employee headcount by 16% worldwide, contributing to cost efficiency [6][7] Q&A Session Summary Question: Future of Nike in China and partnership strategies - Management acknowledges Nike's investment in the offline channel and ongoing negotiations to optimize store operations and reduce costs [36][37] Question: Sustainability of brand support and order placements - Management believes that as a key partner, Topsports will continue to receive strong support from brands, despite a decrease in orders [47][48] Question: Outlook for H2 of fiscal year and product orders from Nike - Management expects to fulfill full-year guidelines and maintain a healthy inventory level, with 70% to 80% of products being new [49][50] Question: Development plans for Aptus - Aptus is positioned as a social infrastructure for runners, focusing on community engagement and brand collaborations [51][52]