Topsports International (6110) H2 2026 earnings summary

Executive summary

• Revenue declined 4.7% year-over-year to CNY 25.74 billion due to weak consumption and lower offline foot traffic, partially offset by online growth.

• Gross profit margin fell by 0.4 percentage points to 38.0%, mainly from deeper discounting and a shift toward online channels.

• Net profit attributable to equity holders decreased by 1.5% to CNY 1.27 billion, with net profit margin improving slightly to 4.9%.

• The company maintained a high dividend payout ratio of 137.1%, with total annual dividends amounting to 28% of profit.

• Operational focus was on optimizing store network, enhancing omni-channel integration, and leveraging digital and AI tools for efficiency.

Financial highlights

• Retail revenue declined 2.7% year-over-year, while wholesale revenue dropped 16.6%.

• Sales of key brands fell 4.2% to CNY 22.3 billion; other brands dropped 7.4% to CNY 3.2 billion.

• SG&A expenses declined 6.7%, with the expense ratio down 0.7 percentage points to 32.4%.

• Inventory decreased by 8.6% year-over-year to CNY 5.49 billion, with turnover days at a four-year low of 131.4 days.

• Net cash from operating activities was CNY 2.73 billion, down 27% year-over-year, and free cash flow was CNY 2.44 billion.

Outlook and guidance

• Management remains conservative for the short term but optimistic for long-term growth.

• Revenue is expected to remain under pressure due to challenging macro and industry conditions.

• Focus will remain on profit stabilization, discount management, and omni-channel efficiency.

• Expense ratios and safety margins will be dynamically adjusted in response to market complexities.

• Commitment to ESG and sustainable development, with ongoing carbon reduction and circular economy initiatives.