Pou Sheng International (3813) Q1 2025 earnings summary

Executive summary

• 1Q25 revenue declined 5.4% year-over-year to RMB 5,107mn, with gross profit down 6.8% and profit attributable to owners down 20.7%.

• Online sales reached a record 32% of total sales, outpacing offline retail amid a competitive e-commerce landscape.

• Same store sales grew 13.9% year-over-year, offsetting lower foot traffic; average selling price remained stable despite higher discounts.

• Focus on profitability, cost control, and digital transformation, with robust net cash position maintained.

Financial highlights

• Gross profit margin fell to 32.7% from 33.2% year-over-year; operating profit margin dropped to 4.5% from 5.1%.

• EBITDA decreased 12.4% year-over-year to RMB 494.7mn; capital expenditure reduced by 32% to RMB 60.2mn.

• Net cash position at RMB 2.46bn, down 18.8% from 1Q24; total borrowings increased to RMB 138.9mn.

• Free cash flow for FY24 was RMB 813.2mn, supporting operations.

• Net profit margin was 2.9%, down from 3.4% in the prior year period.

Outlook and guidance

• Strategic focus on omni-channel growth, digital empowerment, and membership integration to drive future sales and efficiency.

• Targeting continued improvement in profitability and shareholder returns through operational streamlining and digital transformation.

• Plans to scale up new brand contributions and maintain digital sales at ~30% of total.

• Focus remains on agility and flexibility in decision-making amid a volatile and promotional retail environment.