Baozun Inc. Q4 FY2025 earnings call

Mr. Vincent Chiu stated that 2025 marked the successful completion of the initial phase of transformation. BEC became a sustainable cash engine with improved profitability. BBM achieved its first quarterly breakeven in the fourth quarter of 2025, with scale beginning to translate into tangible operating leverage. Operational highlights included BEC's category mix optimization, growth in services revenue, and BBM's store expansion, new store openings, and brand collaborations

Baozun Group's total net revenues for the fourth quarter of 2025 increased by 6% year over year to 3.2 billion RMB. E-commerce revenue grew by 2.5% to 2.6 billion RMB, with services revenue increasing 3.1% to 2 billion RMB and DEC product sales revenue rising modestly by 0.5% to 574.5 million RMB. Brand management revenue rose by 24% to 664 million RMB. E-commerce product sales gross margin expanded to 18.4%, an improvement of 760 basis points, and BBM product sales gross margin improved to 52.1% from 50.4% a year ago

Management aims to drive the group's non-GAAP operating profit growth to 550 million RMB by 2028. For 2026, focus shifts to scaling, with priorities including expanding BEC's margin, building scale and operating leverage in BBM, and deepening synergies between BEC and BBM. BBM plans to open 50 stores in 2026

Looking statements are based on current expectations and involve known or unknown risks, uncertainties beyond the company's control. There was an investment income loss of 230 million RMB due to impairments in previous e-commerce sector investments and incremental provisions for certain equity investments

Q: About AI workflow transformation and impact; A: Leveraged AI for efficiency, tracking consumer behavior changes via big platforms.

Q: About macro sentiment and Gap China growth; A: Strong Chinese New Year and March 8th performance, plan to open 50 stores in 2026 for Gap, with long-term growth drivers including same-store sales, scale expansion, and supply chain efficiency.

Q: About industry changes impact; A: Policies don't greatly affect day-to-day operations, helping brands diversify strategies across platforms.

Q: About 2026 growth outlook and capital allocation; A: Confident in 2026 growth, AI investment focused on best practices for e-commerce and apparel industry.

Q: About overseas business; A: Overseas business has progress but minor contribution expected in coming two years, with carefully selected new brands to be added to portfolio