Sun Art Retail Group (6808) H1 25/26 earnings summary

Executive summary

• Revenue for the six months ended 30 September 2025 was RMB30,502 million, down 12.1% year-over-year, mainly due to intensified competition and weak consumption, with same store sales growth at -11.7%.

• Gross profit was RMB7,719 million, down 9.5%, but gross margin improved to 25.3% from 24.6% year-over-year, driven by product mix optimization and private label growth.

• Net loss for the period was RMB127 million, compared to a profit of RMB186 million in the prior year period.

• The Group executed a three-year strategy focused on product differentiation, supply chain efficiency, private brand expansion, and store transformation.

• Maintains strong financial resilience with ample cash reserves and significant property assets as risk buffers.

Financial highlights

• Revenue: RMB30,502 million (down 12.1% year-over-year).

• Gross profit: RMB7,719 million (down 9.5% year-over-year); gross margin 25.3% (up 0.7 ppt).

• Adjusted EBITDA was RMB1,580 million, with a margin of 5.2%.

• Operating profit dropped 56.4% to RMB271 million; operating margin fell to 0.9%.

• Net cash position at period end was RMB11,958 million.

Outlook and guidance

• The Group will continue executing its three-year strategy, emphasizing SKU reduction, private brand growth, store transformation, and front warehouse network expansion to drive sustainable growth.

• Confident in strategic direction, targeting a 40–50% online sales mix and 10% private brand sales within three years.

• Continued focus on supply chain optimization and digital capabilities to drive future growth.