TOPSPORTS (06110) Announces Interim Results, Profit Attributable to Shareholders RMB663 million, Strengthening New Brand Matrix to Expand Incremental Space

TOPSPORTS (06110) Announces Interim Results for the Six Months Ended August 31, 2026. The Group recorded revenue of RMB10.913 billion (same unit below), a year-on-year decrease of 11.26%; profit attributable to equity holders of the Company was RMB663 million, a year-on-year decrease of 16.03%; earnings per share were 10.68 cents, and an interim dividend of 11 cents per share was proposed. The Group adhered to efficiency first, continuously optimized its omni-channel layout and resource allocation, stepped up expansion of its new brand matrix to open up incremental space, promoted iteration of its capability system, implemented AI-powered digital and intelligent applications, and consolidated operational and management quality through lean operations. We have always regarded product health, category richness, channel flexibility and operational quality as the yardsticks for measuring business performance, and, with user value accumulation and solid cash flow as the foundation, built long-term operating capabilities that can weather cycles and create value. During the period, the Group's revenue decreased by 11.3% year on year to RMB10.913 billion; gross profit margin decreased by 0.9 percentage points year on year to 40.1%, with deeper discounts year on year being the main factor affecting gross profit margin; the Group maintained its consistently prudent approach to expense control, with the selling and distribution expenses ratio maintained at 29.1% and the general and administrative expenses ratio maintained at 4.1%, both consistent with the expense ratios in the same period last year; profit attributable to equity holders of the Company decreased by 16.0% year on year to RMB662.6 million, and the net margin attributable to equity holders decreased by 0.3 percentage points year on year to 6.1%. In terms of inventory health, as of August 31, 2026, inventory amount decreased by 15.7% compared with August 31, 2025, and decreased by 10.4% compared with February 28, 2026; inventory turnover days were 146.4 days, a decrease of 3.6 days compared with the same period last year, and the inventory level remained within a healthy range. Solid cash flow provides the basis for long-term returns to shareholders: during the period, net cash generated from the Group's operating activities was RMB1.844 billion; as of August 31, 2026, the Group's bank balances and cash were RMB3.0876 billion. Based on this, the Board resolved to declare an interim dividend of 11.00 cents per ordinary share for the financial year ending February 28, 2027, with a payout ratio of 102.9%. On July 21, 2026, the Group received formal notice from its major brand partner Nike: the Group's online platform sales of Nike products in mainland China will be fully terminated with effect from January 1, 2027. We expect this adjustment to have a significant negative impact on the Group's business, and, together with the continued weakness in the consumption environment, we expect the Group to face relatively significant business challenges for a period of time going forward, and will continue to assess the relevant impact. As Nike's largest distributor in mainland China, TOPSPORTS has had a long-standing cooperative relationship with Nike spanning a long cycle, and we will always uphold the principles of mutual benefit and win-win cooperation and common growth, and strive to maintain close cooperation with Nike with respect to offline sales arrangements.