Topsports International (6110) Q3 2025 earnings summary

Executive summary

• Q3 performance met expectations, focusing on inventory improvement and optimization, with total sales from retail and wholesale operations declining by a mid-single-digit percentage year-over-year.

• Pre-tax sales revenue declined by mid-single digits year-over-year, with retail slightly outperforming wholesale.

• Online sales drove retail growth, with direct-to-consumer online sales accounting for 40% of direct-to-retail sales, up both sequentially and year-over-year.

• Offline foot traffic remained weak but improved over H1; store closures continued to address underperformance.

Financial highlights

• Pre-tax sales revenue declined by mid-single digits compared to the same quarter last year.

• Direct-to-consumer online sales grew at a double-digit rate worldwide, now representing 40% of direct-to-retail sales.

• Gross margin GFA for directly operated stores decreased by 4.4% year-over-year and 2.1% sequentially as of November 30, 2024.

• Inventory sales ratio at the end of November was 4-5 months, with new products making up 70%-80% of inventory.

Outlook and guidance

• Full-year profit for fiscal 2024-2025 is expected to decline by 35%-45%, consistent with previous guidance.

• Inventory optimization remains the top priority, with expectations to achieve targeted improvements by fiscal year end.

• Store count is expected to stabilize next year, with a cautious yet positive outlook for the offline channel.