TOPSPORTS Interim Results: Revenue Falls 11.3%, Profit Down 16%, Yet Maintains RMB11 Cent Dividend

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TOPSPORTS (06110) reported interim results for the six months ended 31 August 2026, highlighting weaker retail demand and a decline in profitability, yet confirming an unchanged dividend payout.

Financial Performance • Revenue slid 11.3% year-on-year to RMB 10.91 billion, driven by lower offline footfall and a 27.5% drop in wholesale sales. • Gross profit fell 13.1% to RMB 4.38 billion as the gross margin narrowed 0.9 percentage points to 40.1% due to deeper discounting. • Operating profit declined 16.8% to RMB 827.20 million; profit attributable to equity holders decreased 16.0% to RMB 662.60 million. • Basic EPS dropped to RMB 10.68 cents from RMB 12.72 cents.

Cash Flow and Balance Sheet • Operating cash inflow rose to RMB 1.84 billion (1H FY26: RMB 1.35 billion). • Net cash position widened to RMB 1.49 billion, with short-term pledged deposits and cash of RMB 5.74 billion offsetting RMB 4.25 billion in short-term borrowings. • Current ratio stood at 2.0 (end-FY26: 2.4); gearing remained at net-cash.

Operational Metrics • Store rationalisation continued: directly managed outlets shrank 17.4% year-on-year to 3,872, cutting selling area by 12.9%. • Inventory fell 15.7% versus 31 August 2025 to RMB 4.92 billion; inventory turnover improved to 146.4 days from 150.0 days. • Members accounted for roughly 91% of offline and Mini-Program retail sales, with the cumulative user base reaching 95 million.

Dividend An interim dividend of RMB 11.00 cents per share (HK$ 12.81 cents) will be paid on or about 17 December 2026, representing a payout ratio of 102.9% and an aggregate distribution of RMB 682.10 million.

Outlook and Notable Developments On 21 July 2026, Nike notified TOPSPORTS that online sales of Nike products in mainland China will cease from 1 January 2027. Management cautions that the termination will have a “significant” short-term impact amid a subdued consumer environment. The company plans to focus on efficiency, brand diversification—highlighting new outdoor and running labels such as Norrøna and Ciele—and expanded AI-driven merchandising and omni-channel initiatives to mitigate headwinds.

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