Financial Data and Key Metrics Changes - The Prada Group recorded net revenues of EUR 4.1 billion in the first nine months of 2025, representing a 9% increase compared to the same period last year at constant FX [9] - Retail sales increased by 8% in Q3 compared to the prior year, while wholesale sales rose by 4% in the first nine months and 19% in Q3 [9][10] - Royalties grew by 11% over the periods, supported by eyewear and beauty segments [10] Business Line Data and Key Metrics Changes - Prada's performance was resilient, with a -2% change in the first nine months, while Miu Miu reported a significant growth of 41% overall and 29% in Q3 [10] - Church's also returned to double-digit growth in the quarter [11] Market Data and Key Metrics Changes - Asia Pacific saw a 10% growth in the first nine months, with Q3 showing similar trends [11] - The Americas experienced a 15% increase in retail sales over the nine months, with Q3 at +20% [11] - Europe grew by 6% in the nine months, with Q3 trends remaining positive [11] Company Strategy and Development Direction - The company is committed to creative leadership and plans to continue investing in creativity and desirability [13] - There is a focus on maintaining a selective approach to store openings, with plans to close underperforming locations while expanding in key areas [29] - The company aims to balance its product offerings across different price levels and segments [44] Management's Comments on Operating Environment and Future Outlook - Management noted a plateau in growth in China, with expectations of gradual improvement [20][70] - The company is optimistic about the upcoming holiday period and expects to see continued improvement in Q4 [13][14] - Management emphasized the importance of the last six weeks of the year for overall performance [21] Other Important Information - The company is awaiting authorizations for the Versace acquisition, which is not yet closed [18] - Management highlighted the importance of maintaining a strong brand identity while exploring new product segments [44] Q&A Session Summary Question: Initial priorities for Versace integration - The transaction is not closed yet, and authorizations are still pending [18] Question: Current trading and improvement in Q3 - The company observed a plateau in China, with better-than-expected holiday performance [20] Question: Wholesale trends in Q3 - No exceptional timing of shipments was noted [22] Question: Cluster trends for key Prada brands - All clusters showed positive growth, with local transactions driving improvements [28] Question: Store expansion plans for Prada and Miu Miu - Miu Miu has seen store growth, while Prada is taking a more cautious approach [29] Question: Margin expectations for the upcoming year - The company is on track to deliver on margin expectations, with Q4 being crucial [37] Question: FX headwinds for H2 - Hedging strategies are expected to mitigate FX issues for 2025, but 2026 may face challenges [42] Question: Aspirational customers returning - There are weak signals of improvement, but the market remains on a plateau [52] Question: Growth by category in Q3 - Leather goods showed significant growth for both Prada and Miu Miu [109]

Financial Data and Key Metrics Changes - The order intake increased to €771 million, a 4.6% rise compared to the first nine months of 2024 [3] - The net backlog rose by 4.5% to €795 million from €761 million in the previous quarter [3] - Revenues increased by 2.5% to €887 million from €863 million in the previous nine months [3] - EBITDA also grew by 2.5%, reaching €142 million compared to €138 million in the prior year [19] Business Line Data and Key Metrics Changes - The made-to-measure segment saw a significant increase of 32% over the nine months and 185% compared to the previous quarter, representing 55% of the order intake [8][16] - The composite segment remained stable compared to last year, with over half of the intake being above 80 feet, indicating high marginality [16] Market Data and Key Metrics Changes - Europe was the leading market, with a 32% increase compared to the previous nine months and an 89% increase quarter over quarter [16] - The Middle East market performed well with an 18% increase, excluding superyacht orders from the previous year [17] - The U.S. market remained stable, with expectations for improvement in the upcoming season [17] Company Strategy and Development Direction - The company is focused on the made-to-measure segment, which is the most profitable, and is investing in expanding production capacity [10][21] - The company aims to maintain its market position by avoiding aggressive discounting strategies that competitors are employing [19][75] - Future growth is anticipated from the U.S. market, with a strong order pipeline and upcoming boat shows expected to drive sales [28] Management's Comments on Operating Environment and Future Outlook - Management noted that the market is stabilizing after a period of uncertainty due to geopolitical tensions and tariffs [7] - The company is optimistic about the upcoming American season and the Asia Pacific market, despite current challenges in that region [35][36] - The management emphasized the importance of brand strength and customer loyalty, with 44% of order intake coming from repeat clients [37] Other Important Information - The company confirmed its guidance for net revenues of €1,221 million and an adjusted EBITDA margin of 16.5% for the year [30] - Capital expenditures for the first nine months were €64 million, with a target to remain below €90 million for the year [21] Q&A Session Summary Question: Consumer outlook in different regions and early October trends - Management reported positive trends in October, with negotiations converting into contracts and good results from the U.S. and Middle East markets [35] Question: EBITDA margin improvement strategies - Management outlined cost containment measures and expected contributions from the U.S. market to help achieve the EBITDA target [41][42] Question: Update on M&A pipeline - Management is in the process of due diligence for potential acquisitions and is optimistic about signing exclusivity rights with targets [39] Question: Segment mix in ongoing negotiations - Management confirmed that ongoing negotiations are global, with sales across various regions, including Asia Pacific and Europe [47] Question: Pricing dynamics in the second-hand market - Management indicated that the second-hand market is not a concern due to the limited availability of units and the company's focus on scarcity [48] Question: Competitive dynamics and discounting strategies - Management stated that they do not engage in aggressive discounting and focus on maintaining brand value, contrasting with competitors offering steep discounts [75]

Financial Data and Key Metrics Changes - The Prada Group recorded net revenues of €4.1 billion in the first nine months of 2025, representing a 9% increase compared to the same period last year at constant FX [9] - Retail sales increased by 8% in Q3 compared to the prior year, while wholesale sales rose by 4% in the first nine months and 19% in Q3 [9][10] - Royalties grew by 11% over the periods, supported by eyewear and beauty segments [10] Business Line Data and Key Metrics Changes - Prada's performance was resilient, with a -2% change in the first nine months, while Miu Miu reported a significant growth of 41% overall and 29% in Q3 [10] - Church's also returned to double-digit growth in the quarter [11] Market Data and Key Metrics Changes - Asia Pacific saw a 10% growth in the first nine months, with Q3 showing similar trends [11] - Europe experienced a 6% increase, while the Americas had a 15% growth in the nine months, accelerating to 20% in Q3 [11] - The Middle East delivered a solid performance with a 21% increase in the nine months [12] Company Strategy and Development Direction - The company remains committed to creative leadership and plans to continue investing in creativity and desirability [13] - There is a focus on enhancing retail excellence and optimizing store locations, with plans to close underperforming stores while expanding in key areas [29][86] Management's Comments on Operating Environment and Future Outlook - Management noted a plateau in growth in China, with expectations of gradual improvement [20][71] - The company is optimistic about the upcoming holiday period and expects to see continued improvement in Q4 [13][14] Other Important Information - The company is cautious about store expansion, particularly for Prada, while Miu Miu has seen successful store openings [29] - The impact of exchange rates on revenue was noted, with a negative effect of approximately 260 basis points in the first nine months [10] Q&A Session Summary Question: Update on Versace integration - Management clarified that the transaction is not yet closed and is awaiting authorizations [18] Question: Current trading and improvement drivers - Management indicated that the recent improvements are consistent with previous trends, with a plateau observed in China and a strong local customer base in Japan [20] Question: Wholesale trends in Q3 - Management confirmed there were no exceptional factors affecting wholesale trends [22] Question: Cluster trends for key Prada brands - All clusters showed positive growth, with local transactions driving improvements across regions [28] Question: Store expansion plans for Prada and Miu Miu - Miu Miu has successfully opened new stores, while Prada is taking a more cautious approach to expansion [29] Question: Margin expectations for the upcoming year - Management did not provide specific guidance but indicated that they are on track to meet previous margin improvement targets [36][41] Question: FX headwinds for H2 and 2026 - Management acknowledged potential FX headwinds but emphasized that hedging strategies would mitigate impacts for 2025 [42] Question: Aspirational customer trends - Management noted weak signals of improvement but emphasized that the current environment is a plateau [53] Question: Pricing policy for 2026 - Management plans to maintain a similar pricing strategy as in previous years, with adjustments based on regional differences [108] Question: Growth by product category in Q3 - Leather goods showed significant growth for Prada, while ready-to-wear remained the cornerstone for Miu Miu [110]

Financial Data and Key Metrics Changes - The group recorded net revenues of €4.1 billion in the first nine months of the year, up 9% compared to the same period last year at constant FX [9] - Retail sales increased by 8% in Q3 against the same comparatives in the prior year period [9] - Wholesale was up 4% in the first nine months and up 19% in Q3 [10] - Royalties grew by 11% over the period, supported by Eyewear and Beauty [11] - Exchange rates negatively impacted group revenue by approximately 260 basis points during the first nine months and 470 basis points over the quarter [11] Business Line Data and Key Metrics Changes - Prada brand delivered a resilient performance with a decline of 2% in the nine months, while Miu Miu reported sustained growth of 41% and 29% in the quarter [12] - Churches returned to double-digit growth in the quarter [12] Market Data and Key Metrics Changes - Asia Pacific delivered double-digit growth of 10% over the first nine months, with Q3 showing similar trends [13] - The Americas saw retail sales up 15% in the nine months, with Q3 at 20% [14] - Japan grew by 3% over the nine months, with Q3 down 1% but improving quarter on quarter [14] - The Middle East delivered solid performance, up 21% in the nine months, with Q3 moderation at 10% [14] Company Strategy and Development Direction - The company remains committed to creative leadership and plans to continue investing in creativity and desirability [16] - The strategy includes a cautious approach to store expansion, focusing on high-potential locations while closing underperforming stores [36] - The company aims to balance its product mix and explore opportunities in higher price segments [55] Management's Comments on Operating Environment and Future Outlook - Management noted a plateau in China, with expectations of gradual improvement but not returning to previous growth rates [78][120] - The company is optimistic about the upcoming holiday period and expects to see benefits from retail investments [18] - Management emphasized the importance of the last six weeks of the year for performance [18] Other Important Information - The company is focused on maintaining a balance between high-end and accessible products, with ongoing efforts to innovate in product offerings [55] - The company is also exploring opportunities in the jewelry category, with a new collection launched recently [83] Q&A Session Summary Question: Update on Versace integration - The transaction is not yet closed, pending authorizations [22] Question: Current trading and improvement drivers - Observations indicate a plateau in China, with local demand driving improvements in various regions [24][25] Question: Wholesale trends in Q3 - No exceptional timing of shipments was noted; trends are consistent [27] Question: Cluster trends for key product brands - All clusters showed positive performance, with local transactions driving improvements [34] Question: Store expansion plans - Miu Miu has executed store expansions, while Prada is taking a more cautious approach [36] Question: Margin expectations for the full year - Management remains on track for margin improvement, with Q4 being crucial [45] Question: FX headwinds for H2 - Hedging strategies are expected to mitigate FX issues for 2025, with potential headwinds in 2026 [51] Question: Pricing strategy for next year - The company plans to maintain its pricing strategy with adjustments based on regional differences [112] Question: Growth by category in Q3 - Leather goods showed significant growth for both Prada and Miu Miu [114]

Financial Data and Key Metrics Changes - The Prada Group recorded net revenues of €4.1 billion in the first nine months of 2025, representing a 9% increase compared to the same period last year at constant foreign exchange rates [7] - Retail sales increased by 8% in Q3 compared to the prior year, while wholesale sales rose by 4% in the first nine months and 19% in Q3 [8][9] - Royalties grew by 11% over the periods, supported by eyewear and beauty segments [9] Business Line Data and Key Metrics Changes - Prada's performance was resilient, with a -2% change in the first nine months, while Miu Miu reported a significant growth of 41% for the same period and 29% in Q3 [9][10] - Church's also returned to double-digit growth in the quarter [10] Market Data and Key Metrics Changes - Asia Pacific saw a 10% growth in the first nine months, with Q3 showing similar trends [10] - Europe experienced a 6% increase in retail sales over the nine months, while the Americas reported a 15% growth, accelerating to 20% in Q3 [10] - Japan's growth was modest at 3% over the nine months, with Q3 down 1% but showing improvement [10] Company Strategy and Development Direction - The company is committed to maintaining its creative leadership and investing in desirability, with a focus on retail excellence and product innovation [12] - There is a cautious approach to store expansion for Prada, with plans to open 6-8 new stores while closing underperforming locations [23] - The company aims to balance its product offerings across different price points and categories, with a focus on high-value segments [34] Management's Comments on Operating Environment and Future Outlook - Management noted a plateau in growth in China, with expectations of gradual improvement rather than a return to previous high growth rates [17][47] - The company is optimistic about the upcoming holiday season and expects continued improvement in sales [12] - Management emphasized the importance of the last six weeks of the year for overall performance [12] Other Important Information - The company is experiencing a normalization in traffic levels, which is impacting sales performance [5] - The impact of foreign exchange rates is expected to be significant in Q4, with a negative effect of approximately 260 basis points in the first nine months [9] Q&A Session Summary Question: Initial priorities for Versace integration - The transaction is not yet closed, and the company is awaiting necessary authorizations [16] Question: Current trading and improvement in Q3 - Management observed a plateau in China, with some positive signs during holidays, but overall conditions remain stable [17] Question: Wholesale trends in Q3 - There were no exceptional factors affecting wholesale trends; the growth was consistent [19] Question: Cluster trends for key Prada brands - All clusters showed positive growth, with local transactions driving improvements [21] Question: Store expansion plans for Prada and Miu Miu - Miu Miu has seen successful store openings, while Prada is taking a more cautious approach to expansion [23] Question: Margin expectations for the upcoming year - Management did not provide specific guidance on margins but indicated that they are on track to meet previous targets [27] Question: FX headwinds for H2 - Hedging strategies are expected to mitigate FX impacts for 2025, but 2026 may face challenges [31] Question: Pricing policy for next year - The company plans to maintain its pricing strategy with regular adjustments [68] Question: Growth by category in Q3 - Miu Miu's ready-to-wear category and Prada's leather goods showed the most significant growth [70]

Financial Data and Key Metrics Changes - The order intake increased to €771 million, approximately 6% higher than the first nine months of 2024 [3] - The net backlog rose by 4.5% to €795 million compared to €761 million at the end of the first half of 2025 [3] - Revenues increased by 2.5% to €887 million from €863 million in the previous nine months [4] - EBITDA also grew by 2.5% to €142 million compared to €138 million in the prior year [26] Business Line Data and Key Metrics Changes - The made-to-measure segment saw a significant increase of 32% over the nine months and 185% in the last quarter [10][22] - The contribution from the made-to-measure segment increased by nearly 14%, while the superyacht segment generated a 33% increase [25][26] - The Custom Line segment remains a backbone of revenues, with new models contributing to sales [16] Market Data and Key Metrics Changes - Europe was the leading market, with a 32% increase compared to the previous nine months and an 89% increase quarter-over-quarter [23] - The Middle East market performed well with an 18% increase, excluding superyacht orders from the previous year [23] - The Asia Pacific market showed a modest growth of 2%, with a 13% increase but remains a small area for the company [23] Company Strategy and Development Direction - The company is focused on the made-to-measure segment, which represents 55% of the order intake, and aims to maintain its position in the luxury market [9][37] - The company is investing in expanding its dealer network in Asia Pacific to capture potential growth in that region [48] - The management emphasized the importance of brand strength and design in attracting younger clients [50] Management's Comments on Operating Environment and Future Outlook - Management noted that the market is stabilizing after a period of uncertainty due to geopolitical tensions and tariffs [8][9] - The company expects strong performance in the upcoming American season and is optimistic about the visibility of future orders [38] - The management confirmed guidance for net revenues of €1.24 billion and an adjusted EBITDA margin of 16.5% [41] Other Important Information - The company has a positive net financial position of €65 million and aims to exceed €100 million by year-end [31][32] - Capital expenditures for the first nine months were €64 million, with a guidance to remain below €90 million for the year [28] Q&A Session Summary Question: Consumer outlook in different regions and early October trends - Management reported strong negotiations turning into contracts, particularly in the U.S. and Middle East, but noted a flat trend in Asia Pacific [46][48] Question: EBITDA margin improvement and building blocks - Management expects to achieve a 16.5% EBITDA margin by year-end, citing cost containment measures and volume discounts from suppliers [55][57] Question: Update on M&A pipeline - Management is in the process of due diligence for potential acquisitions and is optimistic about signing exclusivity rights with targets [54] Question: Ongoing negotiations and segment mix - Of the €430 million in ongoing negotiations, €80 million has already converted into orders, with a global mix across regions [63] Question: Pricing dynamics and discounts - Management clarified that discounts are reflected in lower revenues, but they maintain a limited discount policy compared to competitors [86] Question: Net working capital expectations - Management confirmed expectations to reach a net working capital to sales ratio around 10% by year-end [72]

Financial Data and Key Metrics Changes - The order intake increased to €771 million, a 4.6% rise compared to the first nine months of 2024 [3] - The net backlog rose by 4.5% to €795 million from €761 million at the end of the previous quarter [3] - Revenues increased by 2.5% to €887 million from €863 million in the previous nine months [3] - EBITDA also grew by 2.5% to €142 million compared to €138 million in the prior year [19] Business Line Data and Key Metrics Changes - The made-to-measure segment saw a significant increase of 32% over the nine months and 185% compared to the previous quarter, representing 55% of the order intake [7][15] - The composite segment remained stable compared to last year, with over half of the intake being above 80 feet, which has similar marginality to made-to-measure [15] Market Data and Key Metrics Changes - Europe was the leading market, with a 32% increase compared to the previous nine months and an 89% increase quarter-over-quarter [16] - The Middle East market performed well with an 18% increase, excluding superyacht orders from the previous year [17] - The U.S. market remained stable, with expectations for improvement in the upcoming season [17] Company Strategy and Development Direction - The company is focused on the made-to-measure segment, which is the most profitable, and has invested in CapEx to increase production capacity [10][21] - The company aims to maintain its position in the luxury market, avoiding aggressive discounting strategies that could harm brand value [26][74] - Future growth is anticipated from the U.S. market, with a focus on larger boats and customization [28] Management's Comments on Operating Environment and Future Outlook - Management noted that the market is stabilizing after a period of uncertainty due to geopolitical tensions and tariffs [6] - There is confidence in achieving the annual guidance, with expectations for continued order intake growth and improved profitability [30] - The company is optimistic about the upcoming boat shows and the potential for increased orders, particularly in the U.S. [28] Other Important Information - The company has a positive net financial position of €65 million, with expectations to exceed €100 million by year-end [22] - CapEx for the first nine months was €64 million, with guidance to remain below €90 million for the year [20][21] Q&A Session Summary Question: Consumer outlook in different regions and early October trends - Management reported strong negotiations turning into contracts, particularly in the U.S. and Middle East, while expressing disappointment in the Asia Pacific market [34][35] Question: EBITDA margin improvement strategies - Management outlined cost containment measures and volume discounts from suppliers as key strategies to maintain EBITDA margins [39][40] Question: Update on M&A pipeline - Management confirmed ongoing discussions with potential targets and entering due diligence processes [38] Question: Segment mix in ongoing negotiations - Management indicated that ongoing negotiations are global, with sales across various regions, including Asia Pacific and Europe [45] Question: Pricing dynamics in the second-hand market - Management stated that the second-hand market is not a concern due to the scarcity of units and limited production [46] Question: Working capital expectations - Management confirmed expectations to achieve a net working capital to sales ratio around 10% by year-end [50]

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, 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]

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]