Pou Sheng International (3813) Q1 2026 earnings summary

Executive summary

• Revenue for 1Q26 was RMB 5,051.5mn, down 1.1% year-over-year, while gross profit increased 1.6% to RMB 1,699mn.

• Operating profit rose 27.4% year-over-year to RMB 294mn, with operating margin at a four-year high of 5.8%.

• Net profit attributable to owners increased 32.5% year-over-year to RMB 183.3mn.

• Operational efficiency, dynamic inventory management, and cross-channel capabilities supported profitability.

• Store network rationalization continued, with directly operated stores down 6.8% year-over-year to 3,205.

Financial highlights

• SG&A expenses decreased 4.4% year-over-year, with the SG&A ratio improving by 1.0 percentage point to 28.5%.

• EBITDA for 1Q26 was RMB 535.3mn, up 8.2% year-over-year.

• Net cash position at quarter-end was RMB 1,815.1mn, down 26.2% from the prior year.

• Free cash flow for the quarter was RMB 122.3mn.

• Total borrowings increased 44.0% year-over-year to RMB 200mn, but net borrowings to equity remained at net cash.

Outlook and guidance

• Focus remains on enhancing profitability, streamlining operations, and digital transformation.

• Strategic priorities include omni-channel integration, membership operations, and scaling new brands.

• Continued emphasis on cost competitiveness and shareholder returns in the coming years.

• Continued focus on operational agility and flexibility to navigate the dynamic retail landscape in mainland China.

• Ongoing enhancement of cross-channel capabilities and restructuring strategy to drive synergies and profitability.