BZUN

Image source: The Motley Fool. Thursday, Aug. 27, 2026 at 7:30 a.m. ET Chairman and Chief Executive Officer - Vincent Qiu Chief Financial Officer - Catherine Zhu Director and Chief Strategy Officer of Baozun Group - Junhua Wu Chief Financial Officer of Baozun Brand Management - Ken Huang Senior Director of Corporate Development and Investor Relations - Wendy Sun Operator: Good morning, ladies and gentlemen, and thank you for standing by for Baozun's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I will now turn the meeting over to your host for today's call, Ms. Wendy Sun, Senior Director of Corporate Development and Investor Relations of Baozun. Please proceed, Wendy. Wendy Sun: Thank you, operator. Hello, everyone, and thank you for joining us today. Our second quarter 2026 earnings release was distributed earlier before this call and is available on our IR website at ir.baozun.com as well as on PR Newswire services. We have also posted a PowerPoint presentation that accompanies our comments to the same IR website, where they are available for your download. On the call today from Baozun, we have Mr. Vincent Qiu, Chairman and Chief Executive Officer; Ms. Catherine Zhu, Chief Financial Officer; Mr. Junhua Wu, Director and Chief Strategy Officer of Baozun Group; and Mr. Ken Huang, Chief Financial Officer of Baozun Brand Management. Ms. Zhu will first share our business strategy and company highlights. Ms. Zhu will then discuss our financials, followed by Mr. Wu and Mr. Huang, who will share more regarding our e-commerce and brand management segments, respectively. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the U.S. Securities Act of 1933 as amended, the U.S. Securities Exchange Act of 1934 as amended and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties or other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the United States Securities and Exchange Commission and its announcement notice or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as of the date hereof and is based on assumptions the company believes to be reasonable as of this date, and the company does not take any obligation to update any forward-looking statements, except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB. In addition, we may elect to use adjusted in place of non-generally accepted accounting principles or non-GAAP in order to reduce overall confusion that may arise from our discussions about financial related to the Gap brand. You may now turn to Slide #2 for the executive highlights for the quarter. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Qiu. Vincent, please go ahead. Wenbin Qiu: Thank you, Wendy. Hello, everyone, and thank you for joining us. We delivered another solid second quarter with earnings quality continuing to improve. Group revenue grew 7% to RMB 2.7 billion, while non-GAAP operating income reached RMB 74 million, a year-over-year improvement of 25% compared with adjusted base of RMB 59 million in the same period of last year. Both BBM and BEC have contributed solid results, demonstrating the strength and the resilience of our business in a competitive market. BEC achieved resilient 5% year-over-year revenue growth. More importantly, BEC improved its efficiency and profitability with expanded non-GAAP operating profit margin. Against a weak E-Commerce industry backdrop, we view this performance as a clear demonstration of BEC improving business quality. Our deep brand know-how has been instrumental in understanding and anticipating market trends, consumer behaviors and brand needs. This expertise enables us to engage with our brand partners more strategically while keeping value creation at the heart of our approach. BBM sustained strong brand momentum, delivering 22% year-over-year top line growth, double-digit same-store growth, solid gross margin expansion and further improvement in operating profitability. Gap remains the primary driver of this performance, supported by our effective MMC initiatives and increased consumer engagements from our seasonal brands ambassador program. At the same time, our emerging brands are progressing according to plan and are beginning to make more contribution to the top line as we start to invest in building their long-term presence. We also are very excited to share our advancements in technology innovation and the AI empowerment. We recently began piloting AI and automation initiatives within our Gap e-commerce operations to streamline selected processes. The initial results have demonstrated substantial productivity gains, highlighting the potential to extend these capabilities across the broader BEC ecosystem. We are glad that the success of our strategic transformation over the past 3 years have laid a strong foundation for a more flexible and scalable business model. Leveraging AI and our established technology infrastructure, BBM provides an environment where we can develop and prove new operating capabilities, while BEC provides a scale to deploy them across a broader portfolio of brands. With continued AI-driven empowerment and deeper synergies between our 2 business segments, we are raising our 2028 non-GAAP operating profit target from RMB 550 million to RMB 700 million, reflecting our increased confidence in long-term growth potential. Now I will hand over the call to our team for a deeper dive into our financials and business performances. Catherine Yanjie Zhu: Thanks, Vincent, and hello, everyone. Now let me provide a more detailed overview of financial results for the second quarter of 2026. Please turn to Slide #3. Baozun Group's total net revenues for the second quarter of 2026 increased by 7% year-over-year to RMB 2.7 billion. Of this total, e-commerce revenue grew by 5% to RMB 2.3 billion, while brand management revenue grew by 22% to RMB 486 million. Breaking down e-commerce revenue by business model, services revenue increased 10% year-over-year to RMB 1.8 billion, while BEC product sales revenue decreased by 10% year-over-year to RMB 541 million as we prioritize business quality. Please turn to Slide #4. From a profitability perspective, gross profit for product sales increased by 21.3% year-over-year to RMB 343 million for the quarter. Our group level blended gross margin for product sales was 33%, representing an expansion of 499 basis points year-over-year. Within this, gross margin for e-commerce product sales was 13% compared with 12.8% in the same period of last year. And the gross margin for BBM was 56.1% for the quarter compared with 52% in the same period of last year. Now please turn to Slide #5 for a walk-through of our OpEx. Sales and marketing expenses increased by RMB 239 million to RMB 1.2 billion. This included an increase of RMB 188 million for BEC, which was mainly due to higher spending on creative content and marketing initiatives under Douyin and RedNote, consistent with the growth in digital marketing revenue. BBM sales and marketing expenses increased by RMB 46 million, mainly driven by the expansion of offline stores and marketing activities in the quarter. Fulfillment costs for the quarter decreased by 9% to RMB 549 million. Technology and content expenses decreased by 0.4% to RMB 114 million. G&A expenses decreased by 22% to RMB 175 million. The reduction in these three OpEx items reflected our focus on cost control and operational efficiency. Turning to bottom line items. Please refer to Slide #6. During the quarter, our non-GAAP income from operations was RMB 74 million compared to RMB 6 million in the same period of last year or RMB 59 million in the rebased same period of last year, if we exclude the onetime write-off costs. BEC's adjusted non-GAAP income from operations was RMB 107 million, a record level for the second quarter since 2022. BBM reported a non-GAAP operating loss of RMB 33 million compared with a loss of RMB 35 million a year ago. For the second quarter of 2026, our working capital turnover improved to 107 days compared with 148 days a year ago. Within this, inventory turnover shortened to 112 days from 134 days a year ago. This improvement was driven by both BEC and BBM segments. As of June 30, 2026, our cash, cash equivalents, restricted cash and short-term investments totaled RMB 2.9 billion. Let me now pass the call over to Junhua to update you on BEC, our e-commerce business. Junhua Wu: Thanks, Catherine, and hello, everyone. For BEC, we have been focused on the quality of growth with greater emphasis on the business where we can deliver high-value results. We believe this approach better aligns an interest of our brand partners with our own, which will ultimately translate into improved productivity and a margin expansion for BEC. During the second quarter, BEC's revenue grew by 5% year-over-year and non-GAAP operating income reached RMB 107 million, the highest second quarter level since 2022. This highlights the improvement in our financial performance and a successful execution of our strategy. Underlying these impressive results, we have taken a proactive approach to refining our service model. We expanded market share in key categories, including luxury, sports and outdoor, driving 10% year-over-year growth in service revenue. Enhanced consumer engagement through content creation, digital marketing and Douyin initiative has also helped strengthen consumer awareness. For example, this June, we produced a large-scale live broadcast of a women night run for one of our own -- one of our sportswear brand partners, more than just a race. The event was designed to empower women and foster a sense of community. Our live broadcast enabled millions of viewers to join the excitement virtually, amplifying the brand's value while creating a memorable experience that resonate with its target audience. This event set a new benchmark for how we can leverage digital platforms to amplify business opportunities while driving both brand value and scales -- and sales. We are proud to have once again been awarded Douyin e-commerce Diamond Service Provider certification for the second quarter. These achievements validate our strategy of prioritizing high-quality revenue streams and expanding margins. And reinforce our confidence in growth momentum of our service business. We also made a strategic decision to scale back to our participation in certain product sales categories where intense price competition and lower margins limit their attractiveness, particularly during the 6/18 campaign. This was most evident in standardized categories such as Home and Furnishing, Beauty and Cosmetics and Appliances. As a result, product sales declined 10% year-over-year for the quarter. For the first half of the year, total product sales reached RMB 1 billion, up slightly by 3% year-over-year and in line with our plans. What is strategic, however, is our investment in infrastructure and capabilities needed to build on apparel product sales business. While this business requires a longer preparation period, we have made solid progress in supply chain management, and advanced data analytics and product development. We believe this model can leverage our deep brand know-how to build a differentiated and scalable product sales business, contributing to both the top line and the bottom line from 2027 onwards. Turning to this profitability. We remain focused on driving greater operating leverage through disciplined cost management and structural efficiency improvements. This significant improvement in BEC's operating performance this quarter reflects the benefits of those efforts, while our increased use of automation provides an additional opportunity to improve productivity over time. As Vincent just highlighted, our trials of AI-enabled systems position us well to reengineer our operation process and unlock significant productivity gains. Over the next 18 months, we expect to accelerate the development of these initiatives across our operations with a particular focus on optimizing resources and aligning them with streamlined workflows. Over time, we believe BEC can evolve into a leaner operation model, allowing us to improve margins while also increasing our capacity to serve a broader range of addressable markets. Now I'll pass to Ken for an update on BBM. Ken Huang: Thank you, Tim, and hello, everyone. Please turn to Slide #9 for BBM's performance in second quarter of 2026. BBM sustained its strong momentum into the second quarter with revenue growing 22% year-over-year and the non-GAAP operating loss further narrowing despite increased investment in emerging brands. For the Gap brand alone, our non-GAAP operating loss improved by more than 40% year-over-year. Solid top line growth was driven by improvements across key operating metrics, including traffic, offline store productivity per square meter and the blended gross margin. Leveraging our omnichannel capabilities and agile integration, Gap delivered another same-store sales growth in the 20s. Our performance continues to validate the competitive advantage of our brand management model. By combining Baozun's local operating capabilities with Gap's global brand, we are able to develop products faster, localize assortments more effectively, execute the integrated marketing campaigns and respond more quickly to changing consumer demand. Overall, BBM gross margin expanded to 56.1%, an improvement of 383 basis points year-over-year. Now let me share our key initiatives around the merchandising, marketing and the channel for Gap during the quarter. Merchandising remained a key strength during the quarter. By optimizing our product assortments and leveraging data-driven insights, we are better able to meet consumer demand and drive sales growth. We are pleased to have achieved the double-digit growth across all three categories of women, men and kids, and improved product mix, tactical pricing initiatives and better supply chain management drove healthy gross margin expansion. Inventory also remained healthy with Gap inventory turnover days at 128, reflecting disciplined inventory management and healthy sell-through. Our marketing efforts focus on building strong brand equity and deepening customer loyalty. Our Chinese brand diversity campaign, together with the Victoria Beckham Collaboration and other global partnerships generated a strong consumer engagement during the second quarter. These campaigns, combined with strong execution around the spring break, Labor Day, 6/18 and the summer sales also drove excellent sales momentum. Turning to our store network. We opened 8 new stores during the quarter, bringing our total network to 167 stores. We remained disciplined in our site selection, and we are glad that new store productivity has consistently outperformed, reinforcing our confidence in the strength of our expansion strategy and the long-term productivity opportunity across our store base. We remain on track to open more than 50 new stores in 2026 with a focus on expanding into Tier 1 to Tier 2 cities. This July and August, we are seeing further improvements in month-over-month momentum. Our latest autumn launch and the Qixi campaign featuring our brand ambassador have reinforced the Gap China's marketing strength, giving us increased confidence in the brand's trajectory for the second half of the year. Now let me also elaborate our key efforts for Hunter brand in the first half of 2026. Following our MMC philosophy for brand management, we have stepped up our efforts to strengthen Hunter's brand equity. In the first half of 2026, we opened the 3 flagship stores in high-profile shopping malls, bringing Hunter's total store count to 16 by end of June. We also enriched Hunter's product offering. Beyond the brand's renowned rain boots, we introduced new lines of urban apparel and outerwear, enabling us to reach a broader consumer base and address diverse lifestyle needs. These initiatives are positioning Hunter as an energetic lifestyle brand that resonates with fashion-forward consumers and supports its long-term goals. In summary, the second quarter reinforced the progress we have made throughout the 2026. Our differentiated brand management model continues to position our brands for outperformance through faster localization, stronger omnichannel execution and operational excellence. We remain confident in delivering on our full year objectives. That concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Operator: [Operator Instructions] The first question today comes from Alicia Yap with Citigroup. Alicis a Yap: Congrats on the solid results. Two questions from me. First is that regarding the revised 2028 annual non-GAAP operating income forecast, which obviously increased substantially from RMB 550 million to RMB 700 million. So I wonder what gives management the confidence to project this higher profitability? And what is the anticipated top line growth that underpins this revised forecast? And then the second question, in light of the weak macro conditions and also muted consumption trends, have you observed any significant shift in the spending budget of your brand partners or their expectation for the China market in the future? And additionally, concerning the adoptions of the AI tools, is there any noticeable divergence in sales growth between brands that have embraced the AI-enhanced tool versus those that have been slower to adopt them? If you could share some examples. Wenbin Qiu: Thank you, Alicia. Vincent here. Let me answer your -- this first question, and Junhua will answer the second one. Yes, we are quite excited to announce this updated forward-looking results for the 2028. We carefully analyzed all the facts, all the aspects, we think can help us to achieve this one, this new goal. The first thing is that we think -- we are seeing a stronger trend for BBM. And in the past 2, 3 years, we keep strengthening BBM's positioning and also day-to-day operations, and we are seeing good results. So for a stronger trend for BBM, we are much more confident right now. This is the first consideration. Secondly, recently, we did a lot of experiments and pioneer for the AI tools and also along with other infrastructural tools we developed along these years, and we see quite exciting results. So we think given that the scale of our BEC business base, our potential to be released from these tools and automation will be huge. So that is a quite important reason why we just raised that up. And also although despite the consumption is not very strong recently, but still, we think combine these two factors and also the potentials we can deploy these kind of tools and AI capabilities into our broad client base, we have quite big potential. And this gives us confidence for this new goal. Junhua Wu: Okay. Thank you, Vincent. So for the second question, so first of all, so we have not seen any significant shifts in spending budgets of brand partners. But we still see they focus on making solid marketing allocation in terms of the traffic fees and they focus more on the content driven and they focus more on shifting allocations of inventory towards the live stream kind of platform like Douyin and the others from the original shelf-based e-commerce systems. And the second part is the AI tools, just like Vincent mentioned, we're leveraging AI scenarios more focused on driving our operation efficiency rather than just driving the top line. So AI tools also can facilitate a lot of top line -- providing a lot of tools to facilitate our top line operator, more focused on digital analytics, more focused on how do we analyze all those sales results data. So for sales growth, we have not leveraged a lot in terms of AI, but also focus on automation-driven, efficiency driven, that kind of stuff. Thank you. Operator: The next question comes from Zhuoming Cao with Huatai Securities. Zhuoming Cao: I have two questions. The first one is regarding the Nike, and we have observed some adjustments to its channel strategy and as Nike's core partner and have we observed any changes in consumer habits across channels recently? And how do we plan to capture the related opportunities going forward? And my second question is about Hunter. And I have observed that Hunter has seen a significant increase in attention on some China social media recently. And have we noticed this trend? And could we introduce any additional details? Could we share or update any outlook for Hunter in more detail? Junhua Wu: Okay. I'll answer the first question, and Vincent or Ken can answer the second one. So apologize to you that I will not mention a specific brand in terms of our strategy and their road map. So I'll give you a feedback in general. So Baozun is a very strong DTC partner of a lot of brand partners from -- since our founded back in the year 2007. So in terms of the behave like a DTC partner, Baozun is definitely has a great advantage in just serving them, supporting them in DTC strategy based on their growth strategy. So if any brands, they are shifting their strategy back to DTC or focus on more -- investing more resources in driving DTC-based net GMV or growth. So Baozun is definitely going to be our top choice. That's my first answer. Ken Huang: For Hunter, yes, we -- as we mentioned, we are continuing investing in our emerging brands, especially this year. And with Gap's, the improvement of Gap's P&L and also the accumulated experience in Gap's past experience. Now we are trying to strengthen our emerging markets. And the -- your observation of the continuous more voices and investment in the brand equity, especially in Xiaohongshu for Hunter is happening. And our strategy for Hunter during the second half of the year, firstly, we will continue to open Hunter stores in high-profile shopping malls. Especially MixC malls. And the second, we are expanding our apparel category, as we mentioned. And we do see the sales contribution of apparels in certain stores have exceeded 30% during the second quarter. And the third, we are also doing a lot of collaborations with local -- both local and international brands for Hunter. And finally, as the IP owner, we are also actively looking for other category business opportunities to enhance the brand's equity and also the profit performance. Thank you. Operator: The next question comes from Frank Tao with CMB International. Ye Tao: I'll add my congrats on a solid set of operating results as well. My question is regarding -- we have seen more international brands exploring strategic alternatives for their China operations, including divestments and other forms of capital restructuring. How does Baozun view this trend? And could it create a meaningful pipeline of opportunities for BBM? Will management become more aggressive in pursuing such opportunities? And what are Baozun's key competitive advantages in winning these deals and creating value after the transaction? Wenbin Qiu: Thank you, Frank. This is Vincent. Happy to answer your question. Yes, we are seeing that in the market, there are more and more this kind of opportunity, which is just as we expected because that's why one of the reasons that we stepped into the brand management market. So we are talking to -- we kept talking to different brands for this. We are quite active in dealing with our portfolio brand partners or some other partners outside of our portfolio, trying to find new opportunities. That's the truth. But talking about the -- our strategy and the link between our strategy with the new updated 2028 goals, we think there are 4 important aspects, which can make us to be more confident for the goal. The first one will be the AI efforts we have made. This can contribute the majority of the contribution in the midterm of our plan. And we mentioned this, and we counted this factor in. Secondly, there will be a very strong synergy between BEC and BBM. BBM, along with its efforts will accumulate a lot of experiences and know-how for the whole group. We can utilize this in talking to potential brands and the existing portfolio brands, no matter acquiring new brands or deepening the relationship between the existing ones. So -- and also this can also deliver a very good contribution to us for the future growth. Third one is about BBM itself. We call this BBM organic. BBM organically, including these 3 major brands, Gap, Hunter and Sweaty Betty, they are doing well. There is -- for example, Gap is doing extremely well. The others are following. So we believe this BBM organic is also a very important factor in the source of our confidence. Number 4 is what you just talked about the BBM new opportunities, yes. We are talking to different brands, but our priority is to make the existing BBM brands better. And we are expecting there are some really, really good opportunities and then we can have this kind of BBM new organic growth opportunity. We also hope this can come true. This gives us more, how to say, possibility to deliver a better goal than before. But of course, this is not counted yet. Thanks for the question. Operator: [Operator Instructions] The next question comes from Yin Jiawei with Citics. Jiawei Yin: Congratulations on this quarter's strong performance. My question is, as AI develops rapidly, many service providers are building their own AI SaaS system. Does the company believe its differentiation versus other e-commerce agency service provider is widening or narrowing? And what impact is AI having on industry concentration at this stage? Junhua Wu: Okay. Thank you for the question, Jiawei. This is Junhua. So if you have deeply tracking Baozun for a while, so you will know that from day one when Baozun was founded, so technology was the key to our success and our mission is leveraging technology to make our business results more and more successful. So during the past 19 years, so we've been investing a lot in our IT resources. So we still maintain the highest IT resources in terms of the IT payroll and different kind of the investment during technology. So under the AI age, so I'll be very proud to say that Baozun is definitely taking the leadership among all other competitors during that sector. So we have definitely leveraged a lot of our resources to help our existing brand partner over 480 to successfully deliver a lot of their backbone system, different kind of DSL system, their auto system among all other kind of scenarios and categories. So under the AI age, as we have so many resources and foreseeing a lot of opportunities, so Baozun is definitely going to leverage a lot of AI-powered technology to increase our efficiency of operation, facilitate our sales growth in terms of the top line growth. So definitely among this period, so we're still strengthening and wider the distance between us and our competitors. So as you can see that AI is really powered for a lot of industry. So we don't see there is many things we can compromise in the future foreseen. So we still focus on a lot of -- all the category basically, AI data-focused, automation increasing, AI knowledge-based and GO consumer behaviors, a lot of scenarios we can help. Thank you for the question. Operator: The next question comes from Thomas Chong with Jefferies. Thomas Chong: So my question is, as we see BBM top line 22% double-digit same-store growth rate, which is quite impressive compared to many peers in the retail industry. So how should we think about the latest trend for third quarter also when we have relative high base for the same period last year? And also, could management provide update on annual BBM top line growth guidance of 15% to 20%. Ken Huang: This is Ken. Yes, Gap, BBM, especially Gap continues to deliver double-digit increase, especially same-stores in 20s for the second quarter. And even for the third quarter, quarter-to-date, we are seeing the trend of even stronger same-store increase. So I would say it will contribute to our MMC strategy. So first is merchandising after several seasons product improvement, we are better understand our customers. When we launched our fall products in August, we see even better acceptance of the products from our consumers than before. And our merchandising operating capabilities also keep enhanced. We have our better category and assortment planning. We have better strategy pricing and discounting strategy. So all these experiences and the initiatives of our merchandising help us to improve the productivity of our performance. And the second for marketing, we continue to deliver strong brand ambassador campaigns in the second quarter is April and in the third quarter is in August. Both of them are exceeding our expectation, the sales [indiscernible]. And we -- this year, we also benefit a lot from Gap's global brand assets. In the third quarter, we have the Hailey Bieber collaboration. And today, we also just announced the collaboration with Malbon, the golf brands -- fashion golf brands. And the third, I think, is the channel. The channel, as we mentioned, we are going to deliver over 50 new stores in this year. And in the second quarter, we have opened many good stores, including Shanghai New Prisma, Beijing apm, Tianjin Teemall, we just opened in the third quarter and also Nanning MixC. And we are also going to open our first Macao store in Venetian next month. So I think with this merchandising, marketing and also channel strategy working well, we are very confident to have -- to keep the strong same-store growth and also the increase of the total scale. For the full year, we believe we will achieve a 20% to 25% increase. Thank you. Operator: The next question comes from Yin Jiawei with Citics. Jiawei Yin: I have another question is that the NBS data in July 2026 points to subdued consumption. Does company observe any change in sales trends across different platforms and different categories? Junhua Wu: Okay. Thank you for the question, Jiawei. This is Junhua again. So we haven't seen a big change in sales trends among different kind of platforms, but we can share something to you is the shelf-based e-commerce is becoming very stable, especially after the past 6/18, we can foresee also expect a very strong finish in the coming Double 11. And the live stream platform is still growing, for example, like Douyin and different kind of the live stream platform. And for categories wise, so we're still seeing very strong growth in premium luxury sector, sports and outdoor sector, fashion sector and health and caring sector. Thank you. Operator: This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks. Wendy Sun: Thank you, operator. On behalf of the Baozun management team, we would like to thank you again for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Baozun, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Baozun wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. 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Baozun Inc. (NASDAQ:BZUN) shares gained 1.77% in pre-market trading on Thursday after the e-commerce solutions provider delivered second-quarter earnings above expectations, while revenue came in slightly below Wall Street forecasts. The company reported adjusted earnings per ADS of RMB0.42 (US$0.06), exceeding consensus expectations. Revenue increased 7.5% year over year to RMB2.74 billion (US$404.3 million) from RMB2.55 billion, although it was marginally below the analyst forecast of RMB2.77 billion. Profitability showed a substantial improvement during the period, with Baozun recording net income of RMB17.0 million (US$2.5 million). That marked a turnaround from the RMB34.0 million net loss reported in the comparable quarter last year. Adjusted operating income climbed to RMB74.3 million (US$10.9 million) from RMB6.1 million a year earlier. The improvement reflected stronger profitability within the company’s E-Commerce division alongside a reduction in losses at Brand Management. The E-Commerce business generated adjusted operating profit of RMB107.1 million (US$15.8 million), compared with RMB41.1 million in the previous year. Meanwhile, the Brand Management division narrowed its adjusted operating loss to RMB33.0 million (US$4.9 million) from RMB35.0 million. “We delivered another solid second quarter, with total revenue growing 7% year-over-year and earnings quality continuing to improve with record operating profits in recent years for the second quarter, amid soft consumer sentiment,” said Vincent Qiu, Chairman and Chief Executive Officer. Baozun’s E-Commerce revenue increased 4.6% year over year, supported by a 10.0% rise in services revenue to RMB1.76 billion. Brand Management recorded an even stronger expansion, with revenue jumping 21.9% to RMB485.6 million. The increase was primarily driven by higher sales from the Gap brand, demonstrating continued momentum within this part of the business. The performance highlights Baozun’s progress in strengthening its earnings profile even as consumer sentiment remains subdued. Alongside its second-quarter results, Baozun increased its annual adjusted operating income target for 2028 to at least RMB700 million, up from its previous objective of RMB550 million. The higher target adds to the positive longer-term picture following the company’s return to net profitability and significant improvement in adjusted operating income. While quarterly revenue narrowly missed analyst forecasts, stronger earnings, expanding services revenue and continued Brand Management growth helped support the positive reaction in Baozun shares. Baozun stock price

SHANGHAI, Aug. 27, 2026 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced its unaudited financial results for the second quarter ended June 30, 2026. Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, commented, "We delivered another solid second quarter, with total revenue growing 7% year-over-year and earnings quality continuing to improve with record operating profits in recent years for the second quarter, amid soft consumer sentiment. BEC delivered resilient growth while further strengthening efficiency and profitability. BBM sustained strong brand momentum, led by continued strength at GAP. In addition, we are also encouraged by the early results from our technology innovation and AI-powered automation pilots, which we expect to accelerate across the Group to enhance productivity, streamline operations, and drive further efficiency gains. With both divisions performing well and synergies deepening, we are confident in our ability to create a powerful platform for mutual growth and a more profitable operating model." Ms. Catherine Zhu, Chief Financial Officer of Baozun Inc., commented, "Our second-quarter results reflect balanced growth across both divisions, with E-Commerce revenue up 5% and Brand Management revenue up 22% year-over-year. Non-GAAP operating income improved to RMB74 million, driven by continued profitability improvement at BEC and a further narrowing of BBM's operating loss. Blended gross margin for product sales expanded by 499 basis points year-over-year, while inventory days improved to 112 days from 134 days a year ago, demonstrating our ongoing effectiveness and discipline in inventory turnover management. With strong business momentum and healthy operating efficiency, we remain confident in sustaining this trajectory of high-quality and profitable growth." Second Quarter 2026 Financial Highlights Total net revenues were RMB2,743.0 million (US$[1]404.3 million), representing an increase of 7.5% compared with RMB2,552.7 million in the same quarter of last year. Income from operations was RMB63.4 million (US$9.3 million), compared with loss from operations of RMB9.4 million in the same quarter of last year. Operating margin was 2.3%, compared with negative 0.4% for the same period of 2025. Non-GAAP income from operations[2] was RMB74.3 million (US$10.9 million), significantly improved compared with RMB6.1 million in the same quarter of last year. Non-GAAP operating margin was 2.7%, compared with 0.2% for the same period of 2025. Net income attributable to ordinary shareholders of Baozun was RMB17.0 million (US$2.5 million), compared with net loss attributable to ordinary shareholders of Baozun of RMB34.0 million for the same period of 2025. Non-GAAP net income attributable to ordinary shareholders of Baozun[4] was RMB24.8 million (US$3.7 million), compared with non-GAAP net loss attributable to ordinary shareholders of Baozun of RMB18.0 million for the same period of 2025. Basic and diluted net income attributable to ordinary shareholders of Baozun per American Depositary Share ("ADS[5]") were both RMB0.29 (US$0.04), compared with basic and diluted net loss attributable to ordinary shareholders of Baozun per American Depositary Share of RMB0.59 for the same period of 2025. Diluted non-GAAP net income attributable to ordinary shareholders of Baozun per ADS[6] was RMB0.42 (US$0.06), compared with diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS RMB0.31 for the same period of 2025. Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement. Adjusted operating profits (losses) are included in the Segments data of Segment Information. Business Highlights Baozun e-Commerce, or "BEC" BEC encompasses our China e-commerce businesses, including brand store operations, customer services, and value-added services covering warehousing and fulfillment, IT and digital marketing. During the second quarter of 2026, total revenue from BEC increased by 4.6% year-over-year, mainly driven by resilient growth in service fee model. BEC's services revenue grew by 10.0% to RMB1,761.8 million, mainly driven by revenue growth in Digital Marketing and IT solutions. Baozun Brand Management, or "BBM" BBM provides holistic brand management, encompassing strategic and tactical positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics, and technology enablement. We aim to leverage our portfolio of technologies to build longer and deeper relationships with brands. During the second quarter of 2026, total revenue from BBM increased by 21.9% year-over-year to RMB485.6 million. We have 184 offline stores under our management at the end of the second quarter of 2026. Second Quarter 2026 Financial Results Total net revenues were RMB2,743.0 million (US$404.3 million), an increase of 7.5% from RMB2,552.7 million in the same quarter of last year. The increase in total net revenues was driven by revenue growth in both the Company's BEC and BBM business lines. Total product sales revenue was RMB1,025.6 million (US$151.1 million), an increase of 3.2% compared with RMB994.1 million in the same quarter of last year, of which, Product sales revenue of E-Commerce was RMB540.8 million (US$79.7 million), a decrease of 9.6% compared with RMB598.6 million in the same quarter of last year. The decrease was primarily attributable to the categories of Home & Furnishing and Cosmetics sectors. Product sales revenue of Brand Management was RMB485.3 million (US$71.5 million), an increase of 22.6% from RMB396.0 million in the same quarter of last year. The increase was primarily driven by higher sales from the Gap brand, as the Company continued to optimize merchandising plans, channels and marketing initiatives. Services revenue was RMB1,717.4 million (US$253.1 million), an increase of 10.2% from RMB1,558.6 million in the same quarter of last year. The increase was primarily attributable to double-digit revenue growth in digital marketing and IT solutions. Total operating expenses were RMB2,679.6 million (US$394.9 million), compared with RMB2,562.0 million in the same quarter of last year. Cost of products was RMB682.8 million (US$100.6 million), compared with RMB711.5 million in the same quarter of last year. The decrease was primarily attributable to lower sales volume within the BEC business, combined with cost reductions driven by efficiency‑improvement initiatives. Fulfillment expenses were RMB549.5 million (US$81.0 million), compared with RMB606.0 million in the same quarter of last year. The decrease was primarily due to a decline in E-commerce warehouse and logistics revenue, along with the Company's cost control initiatives and efficiency improvements. Sales and marketing expenses were RMB1,177.2 million (US$173.5 million), compared with RMB937.8 million in the same quarter of last year. The increase was mainly due to higher revenue contributions from digital marketing services for BEC, as well as increased expenses associated with the expansion of offline stores and marketing activities for BBM during the quarter. Technology and content expenses were RMB114.2 million (US$16.8 million), flat with RMB114.7 million in the same quarter of last year. General and administrative expenses were RMB175.1 million (US$25.8 million), compared with RMB224.4 million in the same quarter of last year. The decrease was primarily due to a write-down of account receivable totaling RMB53.3 million in the same quarter of last year. Income from operations was RMB63.4 million (US$9.3 million), compared with loss from operations of RMB9.4 million in the same quarter of last year. The operating margin was 2.3%, compared with negative 0.4% in the same quarter of last year. Non-GAAP income from operations was RMB74.3 million (US$10.9 million), compared with RMB6.1 million in the same quarter of last year. Non-GAAP operating margin was 2.7%, compared with 0.2% in the same quarter of last year. Adjusted operating profit of E-Commerce was RMB107.1 million (US$15.8 million), compared with RMB41.1 million in the same quarter of last year. Adjusted operating loss of Brand Management was RMB33.0 million (US$4.9 million), compared with RMB35.0 million in the same quarter of last year. Unrealized investment loss was RMB0.2 million (US$0.03 million), compared with RMB4.0 million in the same quarter of last year. The unrealized investment loss of this quarter was primarily due to the decrease in the trading price of publicly listed companies we invested in. Fair value change on financial instruments was a gain of RMB0.9 million (US$0.1 million), compared with RMB4.4 million in the same quarter of last year. The fair value change on financial instruments is mainly comprised of the gain recognized from the financial instruments the Company invested in. Net income attributable to ordinary shareholders of Baozun was RMB17.0 million (US$2.5 million), compared with net loss attributable to ordinary shareholders of Baozun of RMB34.0 million in the same quarter of last year. Basic and diluted net income attributable to ordinary shareholders of Baozun per ADS were both RMB0.29 (US$0.04), compared with basic and diluted net loss attributable to ordinary shareholders of Baozun per ADS RMB0.59 for the same period of 2025. Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. was RMB24.8 million (US$3.7 million), compared with non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. of RMB18.0 million for the same period of 2025. Diluted non-GAAP net income attributable to ordinary shareholders of Baozun per ADS was RMB0.42 (US$0.06), compared with diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS of RMB0.31 for the same period of 2025. Segment Information (a) Description of segments The Group has two operating segments, which are (i) E-Commerce and (ii) Brand Management. The following summary describes the operations in each of the Group's operating segment: (i) E-Commerce focuses on Baozun e-commerce service business and comprises two business lines, BEC (Baozun E-Commerce) and BZI (Baozun International). a> BEC includes our Chinese mainland e-commerce businesses, such as brands' store operations, customer services and value-added services in logistics and supply chain management, IT and digital marketing. b> BZI includes our e-commerce businesses outside of Chinese Mainland, including locations such as Hong Kong SAR, Macau SAR, Taiwan Region and South East Asia. (ii) Brand Management engages in holistic brand management, encompassing strategic and tactical positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics and technology enablement to leverage our portfolio of technologies to build into longer and deeper relationships with brands. The primary brand under the Company's brand management is Gap in Greater China. (b) Segments data The table below provides a summary of the Group's reportable segment results for the three months ended June 30, 2025 and 2026: Business Outlook As the Company continues to leverage technological innovation and AI-powered infrastructure to enhance productivity, it has revised its 2028 annual Non-GAAP income from operations target upward to at least RMB700 million, from RMB550 million. The Company expects to achieve this target primarily through margin expansion in BEC, driven by efficiency and business quality improvements, scale and operating leverage in BBM, and deeper strategic synergies between BEC and BBM. This target is based on the Company's current expectations, assumptions and business outlook and is subject to significant risks and uncertainties that could cause actual results to differ materially. Conference Call The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Thursday, August 27, 2026 (7:30 p.m. Beijing time on the same day). Dial-in details for the earnings conference call are as follows: A replay of the conference call may be accessible through September 3, 2026 by dialing the following numbers: A live webcast of the conference call will be available on the Investor Relations section of Baozun's website at http://ir.baozun.com. An archived webcast will be available through the same link following the call. Use of Non-GAAP Financial Measures The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS, as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP income (loss) from operations as income (loss) from operations excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and cancelation fees of repurchased. The Company defines non-GAAP net income (loss) as net (loss) income excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, cancellation fees of repurchased ADSs, fair value gain on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries, and unrealized investment loss (gain). The Company defines non-GAAP net income (loss) attributable to ordinary shareholders of Baozun as net income (loss) attributable to ordinary shareholders of Baozun excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, cancellation fees of repurchased ADSs, fair value gain on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries, and unrealized investment loss (gain). The Company defines diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS as non-GAAP net income (loss) attributable to ordinary shareholders of Baozun divided by weighted average number of shares used in calculating net income (loss) per ordinary share multiplied by three. The Company presents the non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. Non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that the use of the non-GAAP financial measures facilitates investors to understand and evaluate the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun, and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS is that they do not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the comparability of their financial results to the Company's. In light of the foregoing limitations, the non-GAAP income (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS for the period should not be considered in isolation from or as an alternative to income (loss) from operations, operating margin, net income (loss), net margin, net income (loss) attributable to ordinary shareholders of Baozun and net income (loss) attributable to ordinary shareholders of Baozun per ADS, or other financial measures prepared in accordance with U.S. GAAP. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. The Company encourages you to review the Company's financial information in its entirety and not rely on a single financial measure. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliations of GAAP and Non-GAAP Results." Safe Harbor Statements This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continues," "ongoing," "targets," "guidance," "going forward," "looking forward," "outlook" or other similar expressions. Statements that are not historical facts, including but not limited to statements about Baozun's beliefs and expectations, business trends, growth strategies, operating efficiencies, margin expansion, store openings, brand performance, technology and automation initiatives, and outlook for future periods are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Baozun and the industries in which it operates. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to risks and uncertainties relating to macroeconomic and consumer spending conditions, Baozun's ability to grow and manage its e-commerce and brand management businesses, demand for its brand partners' and managed brands' products, competition, its ability to improve operating efficiency and profitability, its ability to manage inventory and working capital, the pace and effectiveness of its technology and automation initiatives, store expansion and offline retail execution, relationships with brand partners and other third parties, as well as Baozun's filings with the United States Securities and Exchange Commission and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information provided in this announcement is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date, and Baozun undertakes no obligation to update such information, except as required under applicable law. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. About Baozun Inc. Founded in 2007, Baozun Inc. is a leader in brand e-commerce service, brand management, and digital commerce service. Baozun Inc. comprises three major business lines – Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality and sustainable growth. Driven by the principle that "Technology Empowers the Future Success", Baozun's business lines are devoted to empowering their clients' business and navigating their new phase of development. For more information, please visit http://ir.baozun.com. For investor and media inquiries, please contact: Baozun Inc.Ms. Wendy SunEmail: [email protected] (1) These amounts include product sales from E-Commerce and Brand Management of RMB540.8 million and RMB485.3 million for the three months period ended June 30, 2026, respectively, compared with product sales from E-Commerce of RMB598.6 million and Brand Management of RMB396.0 million for the three months period ended June 30, 2025. (2) Share-based compensation expenses are allocated in operating expenses items as follows: (3) These amounts include amortization of intangible assets resulting from business acquisition, which amounted to RMB7.9 million and RMB6.9 million for the three months period ended June 30, 2025 and 2026, respectively. (4) These amounts include income tax benefits of RMB1.8 million and RMB1.5 million related to the reversal of deferred tax liabilities recognized on business acquisition, for the three months period ended June 30, 2025 and 2026, respectively. (1) The Company evaluated the non-GAAP adjustments items and concluded that these items have immaterial income tax effects except for amortization of intangible assets resulting from business acquisition. View original content:https://www.prnewswire.com/apac/news-releases/baozun-announces-second-quarter-2026-unaudited-financial-results-302861739.html

Interested in Baozun Inc.? Here are five stocks we like better. Revenue and profitability improved: Baozun’s Q2 2026 revenue rose 7% to RMB2.7 billion, while non-GAAP operating income increased to RMB74 million from RMB6 million a year earlier. Management raised its 2028 non-GAAP operating profit target to RMB700 million from RMB550 million. E-commerce services and brand management drove growth: E-commerce service revenue grew 10% as Baozun focused on higher-value categories and reduced lower-margin product sales. Brand management revenue rose 22%, led by Gap, whose same-store sales increased in the 20% range and whose operating loss improved by more than 40%. AI, automation and expansion remain key priorities: Baozun reported early productivity gains from AI and automation pilots in Gap’s e-commerce operations and plans to accelerate adoption over the next 18 months. It also intends to open more than 50 Gap stores in 2026 and expects BBM revenue growth of 20% to 25% for the full year. Baozun (NASDAQ:BZUN) reported second-quarter 2026 revenue growth of 7% to RMB2.7 billion, as gains in its e-commerce services and brand management businesses offset a planned reduction in lower-margin product sales categories. Non-GAAP income from operations reached RMB74 million, compared with RMB6 million in the prior-year period. Excluding a one-time write-off in the year-earlier quarter, the comparable figure was RMB59 million. Chairman and Chief Executive Officer Vincent Qiu said the results reflected improving earnings quality and resilience in a competitive e-commerce environment. → Quantum Computing Is Raising the Stakes for Cybersecurity: 5 Stocks to Watch The company also raised its 2028 non-GAAP operating profit target to RMB700 million from RMB550 million, citing confidence in its brand management momentum, artificial intelligence and automation initiatives, and potential synergies between its business segments. Baozun’s e-commerce segment, or BEC, generated RMB2.3 billion in revenue, up 5% from a year earlier. Service revenue increased 10% to RMB1.8 billion, supported by market-share gains in luxury, sports and outdoor categories, as well as greater investment in content creation, digital marketing and Douyin-related initiatives. → NVIDIA Reveals $21 Billion SpaceX Stake: Signal of Confidence or Circular Financing? BEC product sales revenue declined 10% to RMB541 million. Chief Strategy Officer Junhua Wu said Baozun intentionally reduced its exposure to certain standardized product categories, including home furnishings, beauty and cosmetics, and appliances, where price competition was intense and margins were less attractive. For the first half, total product sales were RMB1 billion, up 3% year over year. Wu said the company is investing in supply-chain management, data analytics and product development to build out an apparel product-sales business, which Baozun expects to begin contributing to both revenue and profit from 2027 onward. → Berkshire Boosts Its Bet: This AI Hyperscaler Is Now a Top-3 Holding BEC non-GAAP operating income rose to RMB107 million, which management described as its highest second-quarter level since 2022. Baozun attributed the improvement to cost discipline, structural efficiency measures and a greater focus on higher-value revenue streams. The company has begun piloting AI and automation tools in Gap’s e-commerce operations to streamline selected processes. Qiu said the early trials showed “substantial productivity gains,” while Wu said the near-term emphasis is on improving operational efficiency rather than directly driving sales growth. Baozun expects to accelerate these initiatives over the next 18 months. Brand management, or BBM, revenue increased 22% year over year to RMB486 million. The segment’s non-GAAP operating loss narrowed to RMB33 million from RMB35 million a year earlier, despite additional investment in emerging brands. Gap remained the primary driver of BBM performance. Ken Huang, chief financial officer of Baozun Brand Management, said Gap’s non-GAAP operating loss improved by more than 40% year over year, while same-store sales rose in the 20% range for a second consecutive quarter. Management cited gains in traffic, store productivity and gross margin, as well as product assortment optimization, data-driven merchandising, tactical pricing and supply-chain management. Gap posted double-digit growth across women’s, men’s and kids’ categories, Huang said. BBM gross margin expanded 383 basis points from a year earlier to 56.1%. Gap inventory turnover stood at 128 days, which Huang said reflected disciplined inventory management and healthy sell-through. Baozun opened eight Gap stores during the quarter, bringing the network to 167 stores. The company remains on track to open more than 50 new stores in 2026, with a focus on tier-one and tier-two cities. Huang said management had seen further month-over-month improvement in July and August and now expects full-year BBM revenue growth of 20% to 25%. The company is also investing in Hunter, opening three flagship stores during the first half to bring its store count to 16 as of June 30. Hunter expanded beyond rain boots into urban apparel and outdoor wear. Huang said apparel represented more than 30% of sales in certain Hunter stores during the second quarter. Group gross profit from product sales increased 21.3% to RMB343 million. Blended product-sales gross margin expanded 499 basis points to 33%. E-commerce product-sales gross margin was 13%, compared with 12.8% a year earlier, while BBM gross margin increased from 52% to 56.1%. Sales and marketing expense increased by RMB239 million to RMB1.2 billion. The increase included RMB188 million in BEC spending, largely tied to creative content and marketing on Douyin and Xiaohongshu, and RMB46 million in BBM spending associated with store expansion and marketing activity. Other operating costs declined. Fulfillment costs fell 9% to RMB549 million, technology and content expenses declined 0.4% to RMB114 million, and general and administrative expenses decreased 22% to RMB175 million. Working-capital turnover improved to 107 days from 148 days a year earlier, while inventory turnover improved to 112 days from 134 days. As of June 30, Baozun held RMB2.9 billion in cash equivalents, restricted cash and short-term investments. Qiu said Baozun is seeing more opportunities involving international brands exploring alternatives for their China operations. However, he said the company’s priority remains improving the performance of its existing BBM portfolio, including Gap, Hunter and Sweaty Betty. Management said it has not observed significant changes in brand partners’ spending budgets, although partners are placing greater emphasis on content-driven marketing and shifting inventory toward livestreaming platforms such as Douyin. Wu said shelf-based e-commerce has become stable, while livestreaming platforms continue to grow. By category, Baozun said it continues to see strong growth in premium luxury, sports and outdoor, fashion, and health and care sectors. Baozun Inc is a leading pure-play e-commerce solutions provider based in Shanghai, China. The company specializes in helping global and domestic brands establish and manage their online stores across major Chinese platforms, including Tmall, JD.com, and WeChat. By offering a one-stop service model, Baozun enables brand owners to outsource the complexities of digital retail operations and focus on product development and customer engagement. The company's suite of services encompasses store design and setup, digital marketing and promotion, technology integration, order fulfillment, warehousing and logistics, customer care, and data analytics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Baozun Q2 Earnings Call Highlights" was originally published by MarketBeat. 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This article first appeared on GuruFocus. Total Net Revenues: RMB2.7 billion, up 7% year-over-year. E-commerce Revenue: RMB2.3 billion, up 5% year-over-year. Brand Management Revenue: RMB486 million, up 22% year-over-year. Services Revenue: RMB1.8 billion, up 10% year-over-year. Product Sales Revenue (BEC): RMB541 million, down 10% year-over-year. Gross Profit (Product Sales): RMB343 million, up 21.3% year-over-year. Blended Gross Margin (Product Sales): 33%, up 499 basis points year-over-year. Gross Margin (E-commerce Product Sales): 13%, compared with 12.8% in the same period last year. Gross Margin (BBM): 56.1%, compared with 52% in the same period last year. Non-GAAP Operating Income: RMB74 million, up 25% year-over-year from RMB59 million (rebased). BEC Non-GAAP Operating Income: RMB107 million, a record second-quarter level since 2022. BBM Non-GAAP Operating Loss: RMB33 million, compared with a loss of RMB35 million a year ago. Sales and Marketing Expenses: RMB1.2 billion, up RMB239 million year-over-year. Fulfillment Costs: RMB549 million, down 9% year-over-year. Technology and Content Expenses: RMB114 million, down 0.4% year-over-year. G&A Expenses: RMB175 million, down 22% year-over-year. Working Capital Turnover: Improved to 107 days from 148 days a year ago. Inventory Turnover: Shortened to 112 days from 134 days a year ago. Cash Equivalents, Restricted Cash, and Short-term Investments: RMB2.9 billion as of June 30, 2026. Gap Same-Store Sales Growth: In the 20s (percentage range). Gap Inventory Turnover Days: 128 days. Gap Store Count: 167 stores, with eight new stores opened during the quarter. Hunter Store Count: 16 stores by end of June, with three flagship stores opened in the first half of 2026. Warning! GuruFocus has detected 2 Warning Sign with BZUN. Is BZUN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 27, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Baozun Inc (NASDAQ:BZUN) delivered solid second-quarter results with group revenue growing 7% year-over-year to RMB2.7 billion, and non-GAAP operating income improving 25% to RMB74 million. The e-commerce segment (BEC) achieved resilient 5% revenue growth and a record non-GAAP operating income of RMB107 million for the second quarter since 2022, driven by a 10% increase in service revenue and expanded market share in luxury, sports, and outdoor categories. Brand management (BBM) sustained strong momentum with 22% year-over-year top-line growth, double-digit same-store sales growth for Gap, and gross margin expansion to 56.1%, up 383 basis points year-over-year. The company raised its 2028 non-GAAP operating profit target from RMB550 million to RMB700 million, reflecting increased confidence in long-term growth driven by AI initiatives and BBM synergies. Working capital turnover improved significantly to 107 days from 148 days a year ago, with inventory turnover shortening to 112 days from 134 days, reflecting better operational efficiency and inventory management. BEC product sales revenue decreased by 10% year-over-year to RMB541 million due to a strategic decision to scale back participation in low-margin, price-competitive categories like home furnishings, beauty, and appliances. BBM reported a non-GAAP operating loss of RMB33 million for the quarter, although it narrowed slightly from a loss of RMB35 million a year ago, due to increased investment in emerging brands like Hunter. The company faces a weak e-commerce industry backdrop and subdued consumption trends, as evidenced by NBS data in July 2026, which could pressure future growth. Sales and marketing expenses increased significantly by RMB239 million to RMB1.2 billion, driven by higher spending on creative content and marketing initiatives on platforms like Douyin and Xiaohongshu, which may impact profitability if not offset by revenue growth. The company's strategic pivot to apparel product sales requires a longer preparation period, with contributions to top and bottom lines not expected until 2027, indicating near-term uncertainty in this segment. Q: Regarding the revised 2028 annual non-GAAP operating income forecast, which increased substantially from RMB550 million to RMB700 million, what gives management the confidence to project this higher profitability, and what is the anticipated top-line growth that underpins this revised forecast? A: Vincent Qiu (Chairman and CEO) stated that the confidence comes from several factors. First, they are seeing a stronger trend for BBM (Brand Management) after years of strengthening its positioning and operations. Second, recent experiments with AI tools and other infrastructure developments have shown exciting results, and given the scale of the BEC business, the potential for efficiency gains from automation is huge. He noted that despite weak consumption, the combination of these factors and the potential to deploy AI capabilities across their broad client base gives them confidence in the new goal. Q: We have seen more international brands exploring strategic alternatives for their China operations, including divestments. How does Baozun view this trend, and could it create a meaningful pipeline of opportunities for BBM? Would management become more aggressive in pursuing such opportunities? A: Vincent Qiu (Chairman and CEO) confirmed they are seeing more of these opportunities in the market, which was one of the reasons they entered the brand management space. He outlined four key aspects driving confidence in the updated 2028 goals: 1) AI efforts contributing a majority of the midterm contribution, 2) strong synergies between BEC and BBM, 3) BBM Organic growth (Gap, Hunter, Sweaty Betty) performing well, and 4) BBM new opportunities. He noted that while they are actively talking with different brands, their priority is making existing BBM brands better first, and new opportunities are not yet counted in the revised targets. Q: As we see BBM top line 22% with double-digit same-store growth, how should we think about the latest trends for the third quarter when we have a relatively high base from last year? Also, could management provide an update on the annual BBM top-line growth guidance? A: Ken Huang (CFO of Baozun Brand Management) stated that BBM, especially Gap, continues to deliver double-digit growth with same-store sales in the 20s for Q2, and the trend is even stronger in Q3 to date. He attributed this to their MMC strategy: merchandising improvements with better product acceptance, successful brand ambassador campaigns (Chen Yi in Q2 and another in August), and channel expansion with over 50 new stores planned for 2026, including a first Macau store. He confirmed they are confident in achieving 20%-25% growth for the full year. Q: In light of the weak macro conditions and muted consumption trends, have you observed any significant shifts in the spending budget of your brand partners or their expectations for the China market? Additionally, is there any noticeable divergence in sales growth between brands that have embraced AI-enhanced tools versus those slower to adopt them? A: Junhua Wu (Director and Chief Strategy Officer) said they have not seen significant shifts in brand partners' spending budgets, but partners are focusing on solidifying marketing allocations toward content-driven strategies and shifting inventory towards live-stream platforms like Douyin. Regarding AI, he noted their focus is more on driving operational efficiency rather than directly driving top-line growth. They have not leveraged AI extensively for sales growth yet, but rather for automation and efficiency-driven initiatives. Q: As AI development looks rapid, many service providers are building their own AI systems. Does the company believe its differentiation versus other e-commerce agency service providers is widening or narrowing? What impact is AI having on industry concentration? A: Junhua Wu (Director and Chief Strategy Officer) emphasized that technology has been key to Baozun's success since its founding, and they maintain the highest IT resources in the sector. He stated that under the AI era, Baozun is taking leadership among competitors, leveraging AI-powered technology to increase operational efficiency and facilitate top-line growth. He believes they are strengthening and widening the distance between themselves and competitors, focusing on AI data, automation, AI knowledge bases, and consumer behavior analysis. Q: Regarding Nike, we have observed some adjustments to its channel strategy. As Nike's core partner, have we observed any changes in consumer habits across channels recently, and how do we plan to capture the related opportunities? A: Junhua Wu (Director and Chief Strategy Officer) declined to comment on specific brand strategies but noted that Baozun has been a very strong DTC partner for brand partners since 2007. He stated that if any brands are shifting their strategy back to DTC or focusing more resources on driving DTC-based growth, Baozun is definitely a top choice given their strong advantage in serving and supporting DTC strategies. Q: I have observed that Hunter has seen a significant increase in attention on some China social media recently. Have we noticed this trend, and could we share any additional details or update on the outlook for Hunter? A: Ken Huang (CFO of Baozun Brand Management) confirmed the increased investment in Hunter's brand equity, especially on Xiaohongshu. He outlined the strategy for H2: 1) continuing to open Hunter stores in high-profile shopping malls, 2) expanding the apparel category (with apparel sales contribution exceeding 30% in certain stores during Q2), 3) pursuing collaborations with local and international brands, and 4) actively looking for other category business opportunities as the IP owner to enhance brand equity and profit performance. Q: The NBS data in July 2026 points to subdued consumption. Does the company observe any trends in sales trends across different platforms and different categories? A: Junhua Wu (Director and Chief Strategy Officer) stated they haven't seen a big change in sales trends among platforms. Shelf-based e-commerce is becoming very stable, especially after 618, with expectations of a strong Double Eleven. Live-stream platforms like Douyin are still growing. By category, they continue to see strong growth in premium luxury, sports and outdoor, fashion, and health and caring sectors. Q: Could you provide more details on the BEC business performance, particularly regarding the decision to scale back product sales and the outlook for the apparel product sales business? A: Junhua Wu (Director and Chief Strategy Officer) explained that BEC made a strategic decision to scale back participation in certain product sales categories with intense price competition and lower margins, particularly during the 618 campaign, which was most evident in standardized categories like home and furnishing, beauty and cosmetics, and appliances. This resulted in a 10% year-over-year decline in For the complete transcript of the earnings call, please refer to the full earnings call transcript.

SHANGHAI, Aug. 27, 2026 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced its unaudited financial results for the second quarter ended June 30, 2026. Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, commented, "We delivered another solid second quarter, with total revenue growing 7% year-over-year and earnings quality continuing to improve with record operating profits in recent years for the second quarter, amid soft consumer sentiment. BEC delivered resilient growth while further strengthening efficiency and profitability. BBM sustained strong brand momentum, led by continued strength at GAP. In addition, we are also encouraged by the early results from our technology innovation and AI-powered automation pilots, which we expect to accelerate across the Group to enhance productivity, streamline operations, and drive further efficiency gains. With both divisions performing well and synergies deepening, we are confident in our ability to create a powerful platform for mutual growth and a more profitable operating model." Ms. Catherine Zhu, Chief Financial Officer of Baozun Inc., commented, "Our second-quarter results reflect balanced growth across both divisions, with E-Commerce revenue up 5% and Brand Management revenue up 22% year-over-year. Non-GAAP operating income improved to RMB74 million, driven by continued profitability improvement at BEC and a further narrowing of BBM's operating loss. Blended gross margin for product sales expanded by 499 basis points year-over-year, while inventory days improved to 112 days from 134 days a year ago, demonstrating our ongoing effectiveness and discipline in inventory turnover management. With strong business momentum and healthy operating efficiency, we remain confident in sustaining this trajectory of high-quality and profitable growth." Second Quarter 2026 Financial Highlights Total net revenues were RMB2,743.0 million (US$[1]404.3 million), representing an increase of 7.5% compared with RMB2,552.7 million in the same quarter of last year. Income from operations was RMB63.4 million (US$9.3 million), compared with loss from operations of RMB9.4 million in the same quarter of last year. Operating margin was 2.3%, compared with negative 0.4% for the same period of 2025. Non-GAAP income from operations[2] was RMB74.3 million (US$10.9 million), significantly improved compared with RMB6.1 million in the same quarter of last year. Non-GAAP operating margin was 2.7%, compared with 0.2% for the same period of 2025. Net income attributable to ordinary shareholders of Baozun was RMB17.0 million (US$2.5 million), compared with net loss attributable to ordinary shareholders of Baozun of RMB34.0 million for the same period of 2025. Non-GAAP net income attributable to ordinary shareholders of Baozun[4] was RMB24.8 million (US$3.7 million), compared with non-GAAP net loss attributable to ordinary shareholders of Baozun of RMB18.0 million for the same period of 2025. Basic and diluted net income attributable to ordinary shareholders of Baozun per American Depositary Share ("ADS[5]") were both RMB0.29 (US$0.04), compared with basic and diluted net loss attributable to ordinary shareholders of Baozun per American Depositary Share of RMB0.59 for the same period of 2025. Diluted non-GAAP net income attributable to ordinary shareholders of Baozun per ADS[6] was RMB0.42 (US$0.06), compared with diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS RMB0.31 for the same period of 2025. Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement. Adjusted operating profits (losses) are included in the Segments data of Segment Information. Business Highlights Baozun e-Commerce, or "BEC" BEC encompasses our China e-commerce businesses, including brand store operations, customer services, and value-added services covering warehousing and fulfillment, IT and digital marketing. During the second quarter of 2026, total revenue from BEC increased by 4.6% year-over-year, mainly driven by resilient growth in service fee model. BEC's services revenue grew by 10.0% to RMB1,761.8 million, mainly driven by revenue growth in Digital Marketing and IT solutions. Baozun Brand Management, or "BBM" BBM provides holistic brand management, encompassing strategic and tactical positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics, and technology enablement. We aim to leverage our portfolio of technologies to build longer and deeper relationships with brands. During the second quarter of 2026, total revenue from BBM increased by 21.9% year-over-year to RMB485.6 million. We have 184 offline stores under our management at the end of the second quarter of 2026. Second Quarter 2026 Financial Results Total net revenues were RMB2,743.0 million (US$404.3 million), an increase of 7.5% from RMB2,552.7 million in the same quarter of last year. The increase in total net revenues was driven by revenue growth in both the Company's BEC and BBM business lines. Total product sales revenue was RMB1,025.6 million (US$151.1 million), an increase of 3.2% compared with RMB994.1 million in the same quarter of last year, of which, Product sales revenue of E-Commerce was RMB540.8 million (US$79.7 million), a decrease of 9.6% compared with RMB598.6 million in the same quarter of last year. The decrease was primarily attributable to the categories of Home & Furnishing and Cosmetics sectors. Product sales revenue of Brand Management was RMB485.3 million (US$71.5 million), an increase of 22.6% from RMB396.0 million in the same quarter of last year. The increase was primarily driven by higher sales from the Gap brand, as the Company continued to optimize merchandising plans, channels and marketing initiatives. Services revenue was RMB1,717.4 million (US$253.1 million), an increase of 10.2% from RMB1,558.6 million in the same quarter of last year. The increase was primarily attributable to double-digit revenue growth in digital marketing and IT solutions. Total operating expenses were RMB2,679.6 million (US$394.9 million), compared with RMB2,562.0 million in the same quarter of last year. Cost of products was RMB682.8 million (US$100.6 million), compared with RMB711.5 million in the same quarter of last year. The decrease was primarily attributable to lower sales volume within the BEC business, combined with cost reductions driven by efficiency‑improvement initiatives. Fulfillment expenses were RMB549.5 million (US$81.0 million), compared with RMB606.0 million in the same quarter of last year. The decrease was primarily due to a decline in E-commerce warehouse and logistics revenue, along with the Company's cost control initiatives and efficiency improvements. Sales and marketing expenses were RMB1,177.2 million (US$173.5 million), compared with RMB937.8 million in the same quarter of last year. The increase was mainly due to higher revenue contributions from digital marketing services for BEC, as well as increased expenses associated with the expansion of offline stores and marketing activities for BBM during the quarter. Technology and content expenses were RMB114.2 million (US$16.8 million), flat with RMB114.7 million in the same quarter of last year. General and administrative expenses were RMB175.1 million (US$25.8 million), compared with RMB224.4 million in the same quarter of last year. The decrease was primarily due to a write-down of account receivable totaling RMB53.3 million in the same quarter of last year. Income from operations was RMB63.4 million (US$9.3 million), compared with loss from operations of RMB9.4 million in the same quarter of last year. The operating margin was 2.3%, compared with negative 0.4% in the same quarter of last year. Non-GAAP income from operations was RMB74.3 million (US$10.9 million), compared with RMB6.1 million in the same quarter of last year. Non-GAAP operating margin was 2.7%, compared with 0.2% in the same quarter of last year. Adjusted operating profit of E-Commerce was RMB107.1 million (US$15.8 million), compared with RMB41.1 million in the same quarter of last year. Adjusted operating loss of Brand Management was RMB33.0 million (US$4.9 million), compared with RMB35.0 million in the same quarter of last year. Unrealized investment loss was RMB0.2 million (US$0.03 million), compared with RMB4.0 million in the same quarter of last year. The unrealized investment loss of this quarter was primarily due to the decrease in the trading price of publicly listed companies we invested in. Fair value change on financial instruments was a gain of RMB0.9 million (US$0.1 million), compared with RMB4.4 million in the same quarter of last year. The fair value change on financial instruments is mainly comprised of the gain recognized from the financial instruments the Company invested in. Net income attributable to ordinary shareholders of Baozun was RMB17.0 million (US$2.5 million), compared with net loss attributable to ordinary shareholders of Baozun of RMB34.0 million in the same quarter of last year. Basic and diluted net income attributable to ordinary shareholders of Baozun per ADS were both RMB0.29 (US$0.04), compared with basic and diluted net loss attributable to ordinary shareholders of Baozun per ADS RMB0.59 for the same period of 2025. Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. was RMB24.8 million (US$3.7 million), compared with non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. of RMB18.0 million for the same period of 2025. Diluted non-GAAP net income attributable to ordinary shareholders of Baozun per ADS was RMB0.42 (US$0.06), compared with diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS of RMB0.31 for the same period of 2025. Segment Information (a) Description of segments The Group has two operating segments, which are (i) E-Commerce and (ii) Brand Management. The following summary describes the operations in each of the Group's operating segment: (i) E-Commerce focuses on Baozun e-commerce service business and comprises two business lines, BEC (Baozun E-Commerce) and BZI (Baozun International). a> BEC includes our Chinese mainland e-commerce businesses, such as brands' store operations, customer services and value-added services in logistics and supply chain management, IT and digital marketing. b> BZI includes our e-commerce businesses outside of Chinese Mainland, including locations such as Hong Kong SAR, Macau SAR, Taiwan Region and South East Asia. (ii) Brand Management engages in holistic brand management, encompassing strategic and tactical positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics and technology enablement to leverage our portfolio of technologies to build into longer and deeper relationships with brands. The primary brand under the Company's brand management is Gap in Greater China. (b) Segments data The table below provides a summary of the Group's reportable segment results for the three months ended June 30, 2025 and 2026: Business Outlook As the Company continues to leverage technological innovation and AI-powered infrastructure to enhance productivity, it has revised its 2028 annual Non-GAAP income from operations target upward to at least RMB700 million, from RMB550 million. The Company expects to achieve this target primarily through margin expansion in BEC, driven by efficiency and business quality improvements, scale and operating leverage in BBM, and deeper strategic synergies between BEC and BBM. This target is based on the Company's current expectations, assumptions and business outlook and is subject to significant risks and uncertainties that could cause actual results to differ materially. Conference Call The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Thursday, August 27, 2026 (7:30 p.m. Beijing time on the same day). Dial-in details for the earnings conference call are as follows: A replay of the conference call may be accessible through September 3, 2026 by dialing the following numbers: A live webcast of the conference call will be available on the Investor Relations section of Baozun's website at http://ir.baozun.com. An archived webcast will be available through the same link following the call. Use of Non-GAAP Financial Measures The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS, as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP income (loss) from operations as income (loss) from operations excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and cancelation fees of repurchased. The Company defines non-GAAP net income (loss) as net (loss) income excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, cancellation fees of repurchased ADSs, fair value gain on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries, and unrealized investment loss (gain). The Company defines non-GAAP net income (loss) attributable to ordinary shareholders of Baozun as net income (loss) attributable to ordinary shareholders of Baozun excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, cancellation fees of repurchased ADSs, fair value gain on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries, and unrealized investment loss (gain). The Company defines diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS as non-GAAP net income (loss) attributable to ordinary shareholders of Baozun divided by weighted average number of shares used in calculating net income (loss) per ordinary share multiplied by three. The Company presents the non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. Non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that the use of the non-GAAP financial measures facilitates investors to understand and evaluate the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun, and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS is that they do not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the comparability of their financial results to the Company's. In light of the foregoing limitations, the non-GAAP income (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS for the period should not be considered in isolation from or as an alternative to income (loss) from operations, operating margin, net income (loss), net margin, net income (loss) attributable to ordinary shareholders of Baozun and net income (loss) attributable to ordinary shareholders of Baozun per ADS, or other financial measures prepared in accordance with U.S. GAAP. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. The Company encourages you to review the Company's financial information in its entirety and not rely on a single financial measure. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliations of GAAP and Non-GAAP Results." Safe Harbor Statements This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continues," "ongoing," "targets," "guidance," "going forward," "looking forward," "outlook" or other similar expressions. Statements that are not historical facts, including but not limited to statements about Baozun's beliefs and expectations, business trends, growth strategies, operating efficiencies, margin expansion, store openings, brand performance, technology and automation initiatives, and outlook for future periods are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Baozun and the industries in which it operates. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to risks and uncertainties relating to macroeconomic and consumer spending conditions, Baozun's ability to grow and manage its e-commerce and brand management businesses, demand for its brand partners' and managed brands' products, competition, its ability to improve operating efficiency and profitability, its ability to manage inventory and working capital, the pace and effectiveness of its technology and automation initiatives, store expansion and offline retail execution, relationships with brand partners and other third parties, as well as Baozun's filings with the United States Securities and Exchange Commission and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information provided in this announcement is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date, and Baozun undertakes no obligation to update such information, except as required under applicable law. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. About Baozun Inc. Founded in 2007, Baozun Inc. is a leader in brand e-commerce service, brand management, and digital commerce service. Baozun Inc. comprises three major business lines – Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality and sustainable growth. Driven by the principle that "Technology Empowers the Future Success", Baozun's business lines are devoted to empowering their clients' business and navigating their new phase of development. For more information, please visit http://ir.baozun.com. For investor and media inquiries, please contact: Baozun Inc.Ms. Wendy SunEmail: [email protected] (1) These amounts include product sales from E-Commerce and Brand Management of RMB540.8 million and RMB485.3 million for the three months period ended June 30, 2026, respectively, compared with product sales from E-Commerce of RMB598.6 million and Brand Management of RMB396.0 million for the three months period ended June 30, 2025. (2) Share-based compensation expenses are allocated in operating expenses items as follows: (3) These amounts include amortization of intangible assets resulting from business acquisition, which amounted to RMB7.9 million and RMB6.9 million for the three months period ended June 30, 2025 and 2026, respectively. (4) These amounts include income tax benefits of RMB1.8 million and RMB1.5 million related to the reversal of deferred tax liabilities recognized on business acquisition, for the three months period ended June 30, 2025 and 2026, respectively. (1) The Company evaluated the non-GAAP adjustments items and concluded that these items have immaterial income tax effects except for amortization of intangible assets resulting from business acquisition. View original content:https://www.prnewswire.com/news-releases/baozun-announces-second-quarter-2026-unaudited-financial-results-302861725.html

SHANGHAI, Aug. 13, 2026 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced that it will release its unaudited financial results for the second quarter and the six months ended June 30, 2026 on Thursday, August 27, 2026, before the open of U.S. markets. The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Thursday, August 27, 2026 (7:30 p.m. Beijing time on the same day). Dial-in details for the earnings conference call are as follows: A replay of the conference call may be accessible through September 3, 2026 by dialing the following numbers: A live webcast of the conference call will be available on the Investor Relations section of Baozun's website at http://ir.baozun.com. An archived webcast will be available through the same link following the call. Safe Harbor Statements This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continues," "ongoing," "targets," "guidance," "going forward," "looking forward," "outlook" or other similar expressions. Statements that are not historical facts, including but not limited to statements about Baozun's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to Baozun's filings with the United States Securities and Exchange Commission and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information provided in this press release is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date, and Baozun undertakes no obligation to update such information, except as required under applicable law. About Baozun Inc. Founded in 2007, Baozun Inc. is a leader in brand e-commerce service, brand management, and digital commerce service. Baozun Inc. comprises three major business lines – Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality and sustainable growth. Driven by the principle that "Technology Empowers the Future Success", Baozun's business lines are devoted to empowering their clients' business and navigating their new phase of development. For more information, please visit http://ir.baozun.com. For investor and media inquiries, please contact: Baozun Inc.Ms. Wendy SunEmail: [email protected] View original content:https://www.prnewswire.com/apac/news-releases/baozun-to-announce-second-quarter-2026-unaudited-financial-results-on-august-27-2026-302850626.html

SHANGHAI, June 17, 2026 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced the results of its Annual General Meeting of Shareholders ("AGM"). For details, please refer to the poll results announcement of the Company dated June 16, 2026 published on the websites of the Hong Kong Stock Exchange and the Company. This announcement will also be furnished as an exhibit to a Form 6-K to be filed with the U.S. Securities and Exchange Commission. Safe Harbor Statements This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continues," "ongoing," "targets," "guidance," "going forward," "looking forward," "outlook" or other similar expressions. Statements that are not historical facts, including but not limited to statements about Baozun's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to Baozun's filings with the United States Securities and Exchange Commission and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information provided in this press release is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date, and Baozun undertakes no obligation to update such information, except as required under applicable law. About Baozun Inc. Founded in 2007, Baozun Inc. is a leader in brand e-commerce service, brand management, and digital commerce service. Baozun Inc. comprises three major business lines – Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality and sustainable growth. Driven by the principle that "Technology Empowers the Future Success", Baozun's business lines are devoted to empowering their clients' business and navigating their new phase of development. For more information, please visit http://ir.baozun.com. For investor and media inquiries, please contact: Baozun Inc.Ms. Wendy SunEmail: [email protected] View original content:https://www.prnewswire.com/apac/news-releases/baozun-announces-results-of-annual-general-meeting-of-shareholders-302802449.html

Image source: The Motley Fool. Wednesday, May 20, 2026 at 7:30 a.m. ET Chairman and Chief Executive Officer — Wenbin Qiu Chief Financial Officer — Catherine Yanjie Zhu President, BEC (E-commerce) — Junhua Wu President, BBM (Brand Management) — Ken Huang Director of Investor Relations — Wendy Sun Need a quote from a Motley Fool analyst? Email [email protected] Mr. Qiu will share first about our business strategy and company highlights. Ms. Zhu will then discuss our financials, followed by Mr. Wu and Mr. Huang, who will share more regarding our e-commerce and brand management segment, respectively. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the U.S. Securities Act of 1933 as amended, the U.S. Securities Exchange Act of 1934 as amended and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the U.S. Securities and Exchange Commission and its announcement notice or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as the date hereof and is based upon assumptions that the company believes to be reasonable as of this date, and the company does not undertake any obligation to update any forward-looking statements, except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB. You may now turn to Slide 2 for the executive highlights for the quarter. It is now my pleasure to introduce Chairman and Chief Executive Officer, Mr. Vincent Qiu. Vincent, please go ahead. Wenbin Qiu: Thank you, Wendy. Hello, everyone, and thank you for joining us. Q1 2026 was solid throughout. We achieved growth across every key metric, revenue, profitability and working capital turnover efficiency. For the quarter, group revenue grew 15% year-over-year to CNY 2.4 billion. Non-GAAP operating income turned profitable at CNY 8 million, a significant improvement compared to a loss of CNY 67 million a year ago. Both business lines delivered solid growth in top line and bottom line. Importantly, these are not just financial improvements. They reflect notable progress in sales quality, profitability and cash generation across both engines. BEC resumed sustainable top line growth this quarter with a 10% year-over-year revenue increase compared with scale. What is even more critical is actually the quality of this growth. We will continue to prioritize our revenue streams towards enhancing business quality, refining service satisfaction and ultimately improving overall profitability. With growing synergies with BBM and the integration of this brand management mindset, we aim to engage more deeply with our clients, understand their businesses at a granular level and collaborate closely to drive sustainable growth. BBM delivered acceleration this quarter with revenue up 39% year-over-year and continued improvement in profitability. GAAP reached operating breakeven for the second consecutive quarter. This is especially impressive given the relatively smaller seasonal cycle in the first quarter. We believe this performance is a testament to our methodologies in MMC, merchandising, marketing and channel. We will continue to leverage this proven approach to nurture smaller niche brands within our portfolio to expand our addressable market. The strong Q1 results bolster our confidence in the full year outlook and more importantly, in our ability to excel during the acceleration phase of our business transformation over the next 3 years. Our 2 engines are each playing distinct yet reinforcing roles. BEC is not simply resuming growth. It is becoming a higher quality and a value-driven business. Meanwhile, BBM is accelerating with GAP on a clear path towards 2026 annual operating breakeven. Both engines are performing in sync and operating synergy is beginning to emerge, opening up broader development opportunities and unlocking new growth potential for our company. Now I'll hand over the call to the team for a deeper dive in our financials and business performance. Catherine Yanjie Zhu: Thanks, Vincent, and hello, everyone. Now let me provide a more detailed overview of financial results for the first quarter of 2026. Please turn to Slide #3. Baozun Group's total net revenues for the first quarter of 2026 increased by 15% year-over-year to CNY 2.4 billion. Of this total, e-commerce revenue grew by 10% to CNY 1.9 billion, while brand management revenue grew by 39% to CNY 538 million. Breaking down e-commerce revenue by business model. Services revenue increased 7% year-over-year to CNY 1.4 billion, while BEC product sales revenue increased by 21% year-over-year to CNY 510 million. Please turn to Slide #4. From a profitability perspective, gross profit for product sales increased by 33.6% year-over-year to CNY 350 million for the quarter. Our group level blended gross margin for product sales was 33.5%, representing an expansion of 110 basis points year-over-year. Within this, gross margin for e-commerce product sales expanded to 15.9%, reflecting a 98 basis point improvement from 15% a year ago. Gross margin for BBM was 50% for the quarter compared with 51.6% in the same period of last year. Now please turn to Slide #5 for a walk-through of our OpEx. Sales and marketing expenses increased by CNY 93 million to CNY 893 million. This included an increase of CNY 43 million for BEC, which was mainly due to higher spending on creative content and marketing initiatives ongoing and Red Note, consistent with the growth in digital marketing revenue. BBM sales and marketing expenses increased by CNY 56.8 million, mainly driven by the expansion of offline stores and marketing activities in the quarter. Fulfillment costs for the quarter decreased slightly by 1% to CNY 519 million, reflecting our ongoing efforts in cost optimization. Technology and content expenses increased by 7% to CNY 125 million, primarily due to more revenue contribution from technology monetization. G&A expenses decreased by 4% to CNY 164 million, reflecting our continued focus on cost control and operational efficiency. Turning to bottom line items. Please refer to Slide #6. During the quarter, our non-GAAP income from operations was CNY 8 million compared to a non-GAAP loss from operations of CNY 67 million in the same period of last year. BEC's adjusted non-GAAP income from operations was CNY 13 million, significantly improved from a loss of CNY 46 million a year ago. BBM reported a non-GAAP operating loss of CNY 4.9 million compared with a loss of CNY 21.1 million a year ago. Lastly, with the growing significance of our distribution business across both operating segments, we would like to share key metrics related to capital turnover efficiency and inventory turnover days, first enhancing our transparency and accountability. For the first quarter of 2026, our working capital turnover improved to 109 days compared with 193 days a year ago. Within this, inventory turnover shortened to 113 days from 185 days a year ago. This improvement was driven by both BEC and BBM segments. As of March 31, 2026, our cash, cash equivalents, restricted cash and short-term investments totaled CNY 2.9 billion. Let me now pass the call over to Junhua to update you on BEC, our e-commerce business. Junhua Wu: Thanks, Catherine, and hello, everyone. BEC delivered a solid first quarter with revenue growing 10% year-over-year and non-GAAP operating income of CNY 13 million, a meaningful turnaround from a non-GAAP operating loss of CNY 46 million in the same period last year. This performance reflects both a return to sustainable growth and a meaningful progress on our broader priority of improving revenue quality and expanding margins. Please turn to Slide #7. Our product sales revenue grew 21% year-over-year with broad-based growth across all key categories, benefiting from both deeper relationships that improve execution on major platforms. It is encouraging to see apparel product sales deliver high double-digit growth as our efforts to expand into nonstandard categories began to scale. We continue to deepen our engagement with brand partners in refining go-to-market strategies through channel diversification and merchandising segmentation. We are pleased to have achieved not only healthy top line growth and product sales, but also improvements in gross margin and inventory efficiency. Now please turn to Slide #8. Services revenue from the quarter grew 7% year-over-year. led by digital marketing and IT solutions as well as online store operations. We continue to gain market share in key categories like luxury, sports and outdoor, reflecting the depth and trust of brand partnerships in these high-value segments. In the recently disclosed 2025 Annual Rating Rewards, we were recognized across major marketplaces as top-tier service provider, achieving a grand slam of awards across all platforms. These recognitions including Tmall 6-star service provider, JD Jan Excellence Partner, Douyin Diamond service provider, Tencent Qianucertified Excellent Partner and Retino e-commerce operation partner, reflecting our expanding ability to activate brands across an increasingly complex multichannel landscape. Returning to growth is only part of the story. We are equally focused on the quality of that growth. We have begun conducting comprehensive profitability and productivity analysis across service layers, business models and margin continuous by revenue stream. With the explicit goal of concentrating on higher-value work while reducing exposure to lower ROI services, gross margin improvement is an active priority across both our product sales and service business. Lastly, we continue to focus on strengthening our bottom line. To support this, we are rolling out the enterprise-wide lean initiatives to drive operational agility and cost optimization while scaling the adoption of AI tools across functions to unlock higher productivity, the improvement in quality non-GAAP operating income from a loss of CNY 46 million to a profit of CNY 13 million is an early and tangible signal of this progress. Multiple AI-powered tools have already been deployed across daily operations, and we are expected to drive meaningful efficiency gains. We also have several initiatives aimed at restructuring and reengineering our end-to-end operational process, creating even greater opportunities to capitalize on fast-moving AI advancements. We are encouraged by BEC's first quarter results. Looking ahead, our focus remaining on deepening client relationships, driving service innovation and continuously improving operational excellence and margin quality within this business. Now I'll pass to Ken for an update on Baozun brand management. Ken Huang: Thank you, Junhua, and hello, everyone. Please turn to Slide #9 for BBM's performance in the first quarter of 2026. BBM carried its strong momentum into the first quarter with revenue growing 39% year-over-year. We also achieved a significant improvement in the bottom line with GAP delivering its second consecutive breakeven quarter in non-GAAP operating profits. More encouragingly, the solid growth was driven by gains across key operating metrics, including traffic, conversion and average transaction value. Leveraging our omnichannel capabilities and agile integration, GAP achieved record same-store sales growth in the 20s in first quarter. Gross margin remained healthy at 50% with optimized commercial strategy during the Spring Festival to maximize traffic and conversion during the peak window. Inventory management also improved significantly with BBM inventory turnover reduced to 114 days from 157 days a year ago. Now let me share our key initiatives around merchandising, marketing and the channel for GAP during the quarter. Merchandising, our ability to blend GAP's American casual aesthetic with locally appealing features is connecting strongly with our target consumers. Our online segmentation strategy also moved beyond price-driven initiatives toward more fashion forward and tailormade assortment, an increasingly important driver of online growth. Underpinning both is improved internal alignment. Our merchandising design and product development teams have operated in close coordination for several quarters, translating to tighter supply chain execution, stronger vendor relationships and more consistent cost management. Marketing. Our Q1 campaign strategy reflected displaying the seasonal sequencing. During Chinese New Year, we activated our collaboration, a new addition of class. We're integrating traditional aesthetics through modern design. This marked our second consecutive CNY anchored by a major culture IP following the Forbidden City collaboration in first quarter of 2025. In mid-March, we launched our spring women's campaign Flow in the GAP in collaboration with dance artist Xie Xin through expressive movement and storytelling. The campaign explores themes of self-expression and personal growth among modern women. In fact, the women's division was a standout performer during the quarter. Channels following the successful launch of new stores featuring enhanced visual merchandising and upgraded store image in the fourth quarter, we remodeled and upgraded 2 additional stores in Beijing, Florentia Village and Shine Hills in Q1. We also combined the charm of traditional Chinese aesthetics with contemporary culture in our newly launched flagship store at Taiyuan's Zhonglou Street, creating a unique and engaging shopping experience. The grand opening not only drove strong foot traffic, but also generated a significant social buzz. We remain on track to deliver our full year target of 50 new GAP stores openings, including about 10 new stores planned in Q2. Looking beyond the quarter, our April brand ambassador campaign with Cheng Yi, Moving Forward in GAP continued to outperform. This gives us strong confidence in the momentum and reaffirms the power of well-executed China for China storytelling. Our partnership with GAP Inc. continues to strengthen, including the Victoria Beckham collaboration launched recently and additional IP collaborations planned for the second half of this year. With double-digit top line growth on track, a second consecutive breakeven quarter delivered, we are well positioned to achieve our full year target. That concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Operator: [Operator Instructions] And the first question comes from Frank Tao with CMBI. Ye Tao: Congrats on a solid set of results. Can you help us unpack the drivers behind the strong revenue growth of your BBM business? And how should we think about the growth trajectory in the coming quarters? Ken Huang: The major driver for BBM's growth in first quarter is from GAP. And also, I think from the consumption environment in Q1 because of the effect of winter sale of the spring festival and also the climate change, it helps drive more traffic as we expected. So the overall increase objective for us in 2026 is over 20%. So in the first quarter, we achieved 39%. And in the coming quarters, we are confident to deliver the 20s increase continuously. Operator: And the next question comes from Vicky Wei with Citi. Yi Jing Wei: So my question is mostly related to consumption sentiment and the June 18. So would management share your observation on the current consumption sentiment and the June 18 preparation of brands? What is your expectations for that? And lastly, would you please share some latest update about GAP performance and margin trend? Junhua Wu: Okay. This is Junhua. So let me answer your first 2 questions. First one is regarding the consumer sentiment. So we had a strong Q1. That was due to we had a late CNY, and we had a longer period of the Queen's Day. So for the Q1, so we had a very strong finish on the first quarter, and we foresee the consumer sentiment is growing faster. And for the 618 preparation, actually, we are in the progress of the 618 right now. So tonight is the night for the second big wave of second campaign. So we are looking forward to also foreseeing a strong finish of 618 this time. Thank you. Ken Huang: And for GAP's margin, -- we -- for GAP, our objective is still to keep a relatively stable gross margin during the year, but try to increase the scale effect through both our online and offline channels as well as the BBM headquarters. So by this scale effect, the result is trying to keep improving the store level contribution margin and also in the end, the overall operating margin. Our current performance is on track and also our current expansion plan is also on track. Wenbin Qiu: This is Vincent. Also some more words on this on the margin trend. Actually, in general, the business is contributed by 2 parts, BEC and BBM. You can see that BBM with a higher margin is contributing more growth to the total business. So we can expect the whole business, the margin trend will be improved in the coming quarters. So that is what we are expecting. And also along with the synergy in between BEC and BBM, this gives us more opportunities working with our existing brands in BEC portfolio, which can give us more potential to generate more margin. So that is also a good thing for general margin trend. Operator: And the next question is from Jiawei Yin from Citic. Jiawei Yin: Congratulations on this quarter's strong performance. I have 2 questions. The first is regarding BEC. As growth rate across different e-commerce platforms converge, what new trends are emerging in brand's marketing budget allocation across different channels? And what impact does this have on the company's service pricing and the bargaining power? And my second question is regarding BBM. In the Chairman's letter to shareholders, the company mentioned that it will be very cautious about new brand acquisitions. Could you elaborate on the specific screening criteria such as category positioning, business scale, profitability level and/or deal structure? Junhua Wu: Okay. So this is Junhua. Let me answer your first question. So in terms of the platform allocation between different platforms in terms of the marketing budget, so both platforms and the brands are maintaining a relatively the same CMRTR rate. So we don't see any significant kind of shipment or movement about the budget allocation. But in terms of the spending, the most of brands are switching a little bit from the traditional performance marketing to the content-driven platform like Red Note, like seeding platform, like creating a lot of creative content facilitated by the AI and powered by Baozun. So we realized that this kind of new allocation tends to moving from a traditional performance traffic driving to transaction to setting up an emotion linkage before making transactions based on the content driven. So this is the overall kind of the trend we are foreseeing for leading brands in different categories. And for those kind of impacts that our company as a service provider, which has the bargaining power is we can provide an end-to-end solutions for all those brands in terms of content creating and the performance marketing. And if the brands are dedicating everything to Baozun, so we are able to help them to allocate from the oversight to see how do you allocate the overall budget from performance marketing to content-driven to Retino to Red Cat and then to -- back to the CPS, et cetera. So we can leverage from the omnichannel perspective to use their money wisely. Wenbin Qiu: Vincent here. Let me talk about the brand acquisition thought processes. Yes. The letter is written by me, not AI, so I can clearly remember this sentence, yes. In the past 3 years, I think we have already forged a model, a new model of the development of Baozun. So right now, the model, we are going to a next phase, which is the acceleration phase. So talking about the standards when we talk about the new brands to work with, I think the scale is quite important because we want to accelerate. We want to harvest what we have built in the past. So talking about the scale, we want the bigger scale opportunities. Category-wise, we -- of course, we focus on fashion apparel, which we can utilize the experiences we get from the GAP operation process. So that is a category. And also, we want the new opportunities to bring us profit immediately because we think we -- right now a lot of opportunities emerges in the market. So we can have -- we are in a very good position in talking with this kind of potential opportunities because Baozun's model today is very unique and very valuable. No one today or maybe just very, very few ones who can do MMC from our industry. Because in the past, talking about the e-commerce service sector, we only operate the online channel for brands. But right now, channel, we can do both online and offline. And the channel is only one factor in the MMC methodology. Right now, we know how to do merchandising, how to do marketing, how to do the channel business together. So in this position, we will be very unique and valuable to all the potential brands within the BEC portfolio and outside brands. So we -- our position is so good, so we can have good opportunities. So our standard will be very high, yes. That is what we say we will be very cautious. Operator: [Operator Instructions] And the next question comes from Chris Cao with Huatai Securities. Zhuoming Cao: I have 2 questions. The first one is regarding the AI technology. With the advancement of AI technology, are there any ongoing changes to our service systems and mechanisms for merchants during major promotion events or in our daily operations? And in the long run, how do we view the impact of AI on the key competitive factors in the e-commerce industry? How will the company seize the opportunities and tackle the challenges presented by this shift? And the second question is about the trend in the recent sales. We see that the growth rate of overall online retail sales saw a month-on-month decline in April with the growth of social retail sales data for apparel also narrowing sequentially. How will our e-commerce business and the brand management business, respectively, leverage our strength to sustain our ARFA growth momentum that outperforms the home market? Junhua Wu: Okay. So let me answer your first question and the first half of the second question. So in terms of the AI, so basically, we are leveraging AI mostly focused on our bottom line efficiency. So we know that we have a lot of AI agent, which can do automatically do a lot of job in terms of the saving human powers. So right now, we have a dedicated team in Baozun E-commerce Services segment to really just leverage a lot of AI technology like large-scale mode and AI agent to increasing our efficiency like digital asset management, like customer service and like a lot of kind of the automation work we used to use a lot of intense labor. And in terms of the top line, we haven't realized that the current public service of AI can really help us to do creative job because they are a learning business mode. So we're leveraging those large-scale mode on the top line more focused on to facilitate our operation team to make decisions like getting -- collecting a lot of competitors' data, digital analytics and forming a lot of data formats and giving us a lot of kind of the suggestions based on their learning and their data. So that's more focused on the facilitate our top line growing. So in the long run, that we will closely work with the large platform like Tmall and the other platform, Alibaba and the other platform to leveraging their public services even if they can provide a closed loop like GEO kind of services within their ecosystem. And we also will keep maintenance about our in-house system, upgrading our backbone systems based on our AI. So hopefully, we can share you more at the end of next year. And the second half of the -- second question is -- in terms of the overall business, for online business, we haven't seen a big drop of our online business. So the April business still maintain the same within our budget. So because this is also the beginning of a prewarm stage before the 618 period. So we can realize that a lot of our brands, they are saving their budgeting and they are saving their assortment allocation for the 618. And the 618 kind of campaign is -- has a longer period than last year. So we can realize that within the -- that kind of saving until the right now, I mean, the beginning of the May, so we really just see a big growth compared to the last year in this -- in the beginning of the 618 campaign. So today is also the first wave of the 618 campaign. So we are forward to see that the strong finish will be happening this year for 618. So that's from the online perspective. Ken Huang: And for BBM, I think we have proved in Q1 our ARFA growth momentum with a very high growth rates. And even in April, we still continue to keep the growing trend, not only from online, but also from offline through our well-planned marketing activities and merchandise plan. So for BBM because we -- first, we have GAP target mass market with attractive price range. And we also have Hunter, Sweaty Betty, which target different market segments. So I think our strength is not to use up any brand value, but try to increase the brand value in the same time of increasing the scale. So we have -- after 3 years, we have already deep understanding of online, offline channels, our faster reaction to the market changes. We also built up strong supply chain of knitwear, woven and denim. We also have approved ability in MMC model. So all of this will help us try to meet the consumers' needs. And I think in the end, better understand the brands, better understand the consumers and then you gain your ARFA growth momentum. Operator: And the next question comes from with Jefferies. Unknown Analyst: So I have 2 questions. The first one is, can management share some color about the recent month sales performance? And my second question is for different categories, can management share some outlook for different categories like luxury, apparel, FMCG, consumer electronics and appliance? Junhua Wu: Okay. So let me give you the outlook of the category segmentation. So the sports and outdoor still maintain the leadership in terms of the growth of online categories. And the premium and luxury is follow-up with sports outdoor. FMCG still have a very strong -- they maintain the similar kind of the growth rate compared to last year. And consider about the -- we're just after the Queen's Day. So FMCG, especially the cosmetics category, they already just digested too much of the campaign. So they need to just wait a little bit for several months, maybe 1 or 2 quarters until the Double 11 coming this year. And the consumer electronics, yes, especially for home appliance and electronic devices, so we are -- we have a strong growth rate for the coming -- for the first part of this 618 campaign. So we're looking forward to see a strong finish for consumer electronics category also. So overall, the apparel, fashion apparel category is still taking the lead, follow-up with FMCG and consumer electronics. And for recently month sales performance, Catherine, do you want to share some kind of? Catherine Yanjie Zhu: Okay. Thank you for your question. I think as you see that we have done quite good for the first quarter of 2026. And we are now quite optimistic on several recent months sales performance regarding our top line and also bottom line. So the management still hold very high confidence for our whole group's performance, including both e-commerce part and also our BBM part. So that's all for the question. Operator: And as there are no questions at the present time, I would like to return the floor to management for any closing comments. Wendy Sun: Thank you, operator. On behalf of Baozun management team, we would like to thank you again for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call. Operator: As mentioned, that concludes today's presentation. Thank you for attending today's event and you may now disconnect your lines. 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SHANGHAI, May 20, 2026 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced its unaudited financial results for the first quarter ended March 31, 2026. Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, commented, "The first quarter of 2026 was robust across the board. We achieved growth in revenue, profitability, and improvement in working capital efficiency, reflecting genuine improvement in our value proposition and, in turn, stronger sales and profit conversion. BEC resumed sustainable growth, evolving into a higher-quality and value-driven business through enhanced brand partnerships, tighter BBM integration, and disciplined operational refinement. BBM accelerated its revenue growth, while GAP achieved its second consecutive quarter of non-GAAP operating breakeven, validating the strength of our Merchandising-Marketing-Channel (MMC) methodology. Both divisions are performing in synchrony, and operational synergies are emerging." Chief Financial Officer commented, "We are pleased with our 15% year-over-year revenue growth and the return to non-GAAP operating profitability at the group level, especially given that the first quarter is typically a seasonally softer period for topline performance. Both BEC and BBM significantly improved their bottom lines alongside double-digit revenue growth. We also conducted comprehensive working capital reviews and streamlined technology processes to further optimize resource allocation and operating efficiency. Overall, working capital turnover days in the first quarter of 2026 improved to 109 days from 193 days in the first quarter of 2025, reflecting our operational discipline and rigor. With focused execution, enhanced margins, and strong performance from both divisions, we remain confident in sustaining our profitability trajectory." First Quarter 2026 Financial Highlights Total net revenues were RMB2,381.1 million (US$[1]345.2 million), representing an increase of 15.3% compared with RMB2,064.4 million in the same quarter of last year. Income from operations was RMB0.3 million (US$0.04 million), compared with loss from operations of RMB84.0 million in the same quarter of last year. Operating margin was 0.01%, compared with negative 4.1% for the same period of 2025. Non-GAAP income from operations[2] was RMB8.1 million (US$1.2 million), compared with non-GAAP loss from operations of RMB66.9 million in the same quarter of last year. Non-GAAP operating margin was 0.3%, compared with negative 3.2% for the same period of 2025. Net loss attributable to ordinary shareholders of Baozun was RMB7.5 million (US$1.1 million), narrowed from RMB63.1 million for the same period of 2025. Non-GAAP net income attributable to ordinary shareholders of Baozun[4] was RMB1.4 million (US$0.2 million), compared with non-GAAP net loss attributable to ordinary shareholders of Baozun of RMB57.2 million for the same period of 2025. Basic and diluted net loss attributable to ordinary shareholders of Baozun per American Depositary Share ("ADS[5]") were both RMB0.13 (US$0.02), compared with RMB1.09 for the same period of 2025. Diluted non-GAAP net income attributable to ordinary shareholders of Baozun per ADS[6] was RMB0.02 (US$0.00[7]), compared with diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS RMB0.99 for the same period of 2025. Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement. Adjusted operating profits (losses) are included in the Segments data of Segment Information. Business Highlights Baozun e-Commerce, or "BEC" BEC encompasses our China e-commerce businesses, including brand store operations, customer services, and value-added services covering warehousing and fulfillment, IT and digital marketing. During the first quarter of 2026, total revenue from BEC increased by 10.4% year-over-year, mainly driven by resilient growth in both product sales and service fee model. BEC's product sales grew 20.6% year-over-year compared with the same period of 2025, with broad-based growth across all key categories, benefiting from both deeper brand relationships and improved execution on major platforms. BEC's services revenue grew by 7.1% to RMB1,376.2 million, mainly driven by revenue growth in Digital Marketing and IT solutions and online store operations. Baozun Brand Management, or "BBM" BBM provides holistic brand management, encompassing strategic and tactical positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics, and technology enablement. We aim to leverage our portfolio of technologies to build longer and deeper relationships with brands. During the first quarter of 2026, total revenue from BBM increased by 38.8% year-over-year to RMB537.8 million. We have 176 offline stores under our management at the end of the first quarter of 2026. First Quarter 2026 Financial Results Total net revenues were RMB2,381.1 million (US$345.2 million), an increase of 15.3% from RMB2,064.4 million in the same quarter of last year. The increase in total net revenues was driven by revenue growth in both the Company's BEC and BBM business lines. Total product sales revenue was RMB1,045.0 million (US$151.5 million), an increase of 29.1% compared with RMB809.3 million in the same quarter of last year, of which, Product sales revenue of E-Commerce was RMB510.3 million (US$74.0 million), an increase of 20.6% compared with RMB423.2 million in the same quarter of last year. The increase was primarily driven by sales growth across all key categories, benefiting from both deeper brand relationships and improved execution on major platforms. Product sales revenue of Brand Management was RMB537.6 million (US$77.9 million), an increase of 39.0% from RMB386.7 million in the same quarter of last year. The increase was primarily driven by higher sales from the Gap brand, as the Company continued to optimize merchandising plans, channels and marketing initiatives to boost sales. Services revenue was RMB1,336.0 million (US$193.7 million), an increase of 6.5% from RMB1,255.1 million in the same quarter of last year. The increase was primarily attributable to double-digit revenue growth in digital marketing and IT solutions and online store operations. Total operating expenses were RMB2,380.8 million (US$345.1 million), compared with RMB2,148.4 million in the same quarter of last year. Cost of products was RMB694.8 million (US$100.7 million), compared with RMB547.2 million in the same quarter of last year. The increase was primarily driven by growth in sales volume, partially offset by cost reductions resulting from efficiency improvements. Fulfillment expenses were RMB519.2 million (US$75.3 million), compared with RMB524.5 million in the same quarter of last year. The decrease was primarily due to a decline in E-commerce warehouse and logistics revenue, along with the Company's cost control initiatives and efficiency improvements. Sales and marketing expenses were RMB893.3 million (US$129.5 million), compared with RMB800.4 million in the same quarter of last year. The increase was mainly due to higher revenue contributions from digital marketing services for BEC, as well as increased expenses associated with the expansion of offline stores and marketing activities for BBM during the quarter. Technology and content expenses were RMB124.8 million (US$18.1 million), compared with RMB116.5 million in the same quarter of last year. The increase was primarily due to more revenue contribution from technology monetization, partially offset by the company's continued efforts to implement cost control and efficiency improvement initiatives. General and administrative expenses were RMB164.2 million (US$23.8 million), compared with RMB170.5 million in the same quarter of last year. The decrease was primarily due to the company's continued efforts to implement cost control and efficiency improvement initiatives. Income from operations was RMB0.3 million (US$0.04 million), compared with loss from operations of RMB84.0 million in the same quarter of last year. The operating margin was 0.01%, compared with negative 4.1% in the same quarter of last year. Non-GAAP income from operations was RMB8.1 million (US$1.2 million), compared with non-GAAP loss from operations of RMB66.9 million in the same quarter of last year. Non-GAAP operating margin was 0.3%, compared with negative 3.2% in the same quarter of last year. Adjusted operating profit of E-Commerce was RMB13.0 million (US$1.9 million), a significant improvement from adjusted operating loss of RMB45.8 million in the same quarter of last year. Adjusted operating loss of Brand Management was RMB4.9 million (US$0.7 million), a significant improvement from RMB21.1 million in the same quarter of last year. Unrealized investment loss was RMB4.4 million (US$0.6 million), compared with an unrealized investment gain of RMB12.4 million in the same quarter of last year. The unrealized investment loss of this quarter was primarily due to the decrease in the trading price of publicly listed companies we invested in. Fair value change on financial instruments was a gain of RMB0.9 million (US$0.1 million), compared with a loss of RMB13.6 million in the same quarter of last year. The fair value change on financial instruments is mainly comprised of the gain recognized from the financial instruments the Company invested in. Exchange gain was RMB2.5 million (US$0.4 million), due to exchange rate fluctuation in the quarter ended March 31, 2026, compared to exchange gain of RMB8.2 million in the same quarter of last year. Net loss attributable to ordinary shareholders of Baozun was RMB7.5 million (US$1.1 million), compared with RMB63.1 million in the same quarter of last year. Basic and diluted net loss attributable to ordinary shareholders of Baozun per ADS were both RMB0.13 (US$0.02), compared with RMB1.09 for the same period of 2025. Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. was RMB1.4 million (US$0.2 million), compared with non-GAAP net loss attributable to ordinary shareholders of Baozun Inc. of RMB57.2 million for the same period of 2025. Diluted non-GAAP net income attributable to ordinary shareholders of Baozun per ADS was RMB0.02 (US$0.00[8]), compared with diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS of RMB0.99 for the same period of 2025. Segment Information (a) Description of segments The Group has two operating segments, which are (i) E-Commerce and (ii) Brand Management. The following summary describes the operations in each of the Group's operating segment: (i) E-Commerce focuses on Baozun traditional e-commerce service business and comprises two business lines, BEC (Baozun E-Commerce) and BZI (Baozun International).a> BEC includes our mainland China e-commerce businesses, such as brands' store operations, customer services and value-added services in logistics and supply chain management, IT and digital marketing.b> BZI includes our e-commerce businesses outside of Chinese Mainland, including locations such as Hong Kong SAR, Macau SAR and Taiwan Region and South East Asia.(ii) Brand Management engages in holistic brand management, encompassing strategic and tactical positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics and technology enablement to leverage our portfolio of technologies to build into longer and deeper relationships with brands. The primary brand under the Company's brand management is Gap in Greater China. (b) Segments data The table below provides a summary of the Group's reportable segment results for the three months ended March 31, 2025 and 2026: Conference Call The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Wednesday, May 20, 2026 (7:30 p.m. Beijing time on the same day). Dial-in details for the earnings conference call are as follows: A replay of the conference call may be accessible through May 26, 2026 by dialing the following numbers: A live webcast of the conference call will be available on the Investor Relations section of Baozun's website at http://ir.baozun.com. An archived webcast will be available through the same link following the call. Use of Non-GAAP Financial Measures The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS, as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP income (loss) from operations as income (loss) from operations excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and cancelation fees of repurchased. The Company defines non-GAAP net income (loss) as net (loss) income excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, cancellation fees of repurchased ADSs, fair value gain on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries, and unrealized investment loss (gain). The Company defines non-GAAP net income (loss) attributable to ordinary shareholders of Baozun as net income (loss) attributable to ordinary shareholders of Baozun excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, cancellation fees of repurchased ADSs, fair value gain on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries, and unrealized investment loss (gain). The Company defines diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS as non-GAAP net income (loss) attributable to ordinary shareholders of Baozun divided by weighted average number of shares used in calculating net income (loss) per ordinary share multiplied by three. The Company presents the non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. Non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that the use of the non-GAAP financial measures facilitates investors to understand and evaluate the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun, and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS is that they do not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the comparability of their financial results to the Company's. In light of the foregoing limitations, the non-GAAP income (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS for the period should not be considered in isolation from or as an alternative to income (loss) from operations, operating margin, net income (loss), net margin, net income (loss) attributable to ordinary shareholders of Baozun and net income (loss) attributable to ordinary shareholders of Baozun per ADS, or other financial measures prepared in accordance with U.S. GAAP. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. The Company encourages you to review the Company's financial information in its entirety and not rely on a single financial measure. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliations of GAAP and Non-GAAP Results." Safe Harbor Statements This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continues," "ongoing," "targets," "guidance," "going forward," "looking forward," "outlook" or other similar expressions. Statements that are not historical facts, including but not limited to statements about Baozun's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to Baozun's filings with the United States Securities and Exchange Commission and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information provided in this announcement is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date, and Baozun undertakes no obligation to update such information, except as required under applicable law. About Baozun Inc. Founded in 2007, Baozun Inc. is a leader in brand e-commerce service, brand management, and digital commerce service. Baozun Inc. comprises three major business lines – Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality and sustainable growth. Driven by the principle that "Technology Empowers the Future Success", Baozun's business lines are devoted to empowering their clients' business and navigating their new phase of development. For more information, please visit http://ir.baozun.com. For investor and media inquiries, please contact: Baozun Inc.Ms. Wendy SunEmail: [email protected] View original content:https://www.prnewswire.com/news-releases/baozun-announces-first-quarter-2026-unaudited-financial-results-302777444.html

Interested in Baozun Inc.? Here are five stocks we like better. Revenue and profitability improved in Q1 2026, with total net revenue up 15% year over year to RMB 2.4 billion and non-GAAP operating income turning positive at RMB 8 million, versus a loss a year ago. Baozun’s e-commerce business returned to growth, with revenue up 10% and adjusted non-GAAP operating income of RMB 13 million, helped by stronger product sales, services revenue, and gains in categories like apparel, luxury, and sports/outdoor. Brand management remained a key growth driver, as BBM revenue jumped 39% on Gap momentum, with record same-store sales growth and management reaffirming confidence in over-20% full-year growth for the segment. Baozun (NASDAQ:BZUN) reported a stronger first quarter of 2026, with management pointing to revenue growth across both its e-commerce and brand management businesses, improved profitability and faster working capital turnover. Chairman and Chief Executive Officer Vincent Qiu said on the company’s earnings call that the quarter was “solid throughout,” citing growth in revenue, profitability and working capital efficiency. Total net revenue rose 15% year over year to RMB 2.4 billion. Non-GAAP operating income was RMB 8 million, compared with a non-GAAP operating loss of RMB 67 million in the same period a year earlier. → Why Applied Optoelectronics Stock May Be Near a Turning Point Qiu said the performance reflected progress beyond headline financial results, including better “sales quality, profitability, and cash generation” across Baozun’s two main businesses: Baozun E-Commerce, or BEC, and Baozun Brand Management, or BBM. Baozun’s e-commerce revenue increased 10% year over year to RMB 1.9 billion in the first quarter. Within that segment, services revenue rose 7% to RMB 1.4 billion, while e-commerce product sales revenue grew 21% to RMB 510 million. → The Pentagon's AI Pivot Supercharges Defense Stocks Junhua Wu, director and chief strategy officer of Baozun Group, said BEC delivered “a return to sustainable growth” while also improving revenue quality and margins. BEC posted adjusted non-GAAP operating income of RMB 13 million, a sharp improvement from a non-GAAP operating loss of RMB 46 million in the prior-year period. Wu said product sales grew across key categories, with apparel product sales delivering high double-digit growth as the company expanded into non-standard categories. He also said services revenue was led by digital marketing, IT solutions and online store operations. Baozun continued to gain share in categories including luxury, sports and outdoor, according to Wu. → Ackman and Berkshire Are Betting Against Each Other on AI The company also emphasized improvements in service quality and platform recognition. Wu said Baozun received several 2025 annual marketplace awards, including recognition as a Tmall 6-star service provider, JD.com Excellence Partner, Douyin Diamond Service Provider, Tencent Qianyu certified excellent partner and Weimob e-commerce operation partner. BBM revenue rose 39% year over year to RMB 538 million in the first quarter. Ken Huang, chief financial officer of Baozun Brand Management, said the segment’s growth was mainly driven by Gap, and that the quarter benefited from winter sales, the Spring Festival period and climate-related traffic trends. Huang said Gap achieved record same-store sales growth “in the 20s” during the first quarter, supported by gains in traffic, conversion and average transaction value. BBM’s gross margin was 50% in the quarter, compared with 51.6% a year earlier. Management said the segment delivered its second consecutive break-even quarter on a non-GAAP operating profit basis, while BBM’s non-GAAP operating loss narrowed to RMB 4.9 million from RMB 21.1 million a year ago. Huang outlined several Gap initiatives during the quarter, including product localization, more fashion-forward online assortments and marketing campaigns tied to Chinese New Year and women’s apparel. The company launched a Peking Opera collaboration during the Lunar New Year period and later introduced its “Flow in the GAP” spring women’s campaign with dance artist Xie Xin. On the store side, Huang said Baozun remodeled and upgraded two Gap stores in Beijing and opened a flagship store at Taikoo Li Sanlitun. The company remains on track to open 50 new Gap stores in 2026, including about 10 planned in the second quarter. Gross profit for product sales increased 33.6% year over year to RMB 350 million. Baozun’s blended gross margin for product sales expanded 110 basis points to 33.5%. E-commerce product sales gross margin rose to 15.9% from 15% a year earlier, while BBM’s gross margin was 50%. Sales and marketing expenses increased by RMB 93 million to RMB 893 million. Management said BEC’s increase was mainly due to spending on creative content and marketing initiatives on Douyin and VANOAD, while BBM’s increase reflected offline store expansion and marketing activities. Fulfillment costs decreased 1% to RMB 590 million, technology and content expenses rose 7% to RMB 125 million, and general and administrative expenses declined 4% to RMB 164 million. Baozun also reported improved capital efficiency. Working capital turnover improved to 109 days from 193 days a year ago, while inventory turnover shortened to 113 days from 185 days. The company had RMB 2.9 billion in cash equivalents, restricted cash and short-term investments as of March 31, 2026. During the question-and-answer portion of the call, Wu said the company saw a strong first quarter helped by the timing of Chinese New Year and a longer Women’s Day period. He said Baozun was in the middle of the 618 shopping festival and expected a strong finish. Asked about marketing budgets, Wu said brands were shifting some spending from traditional performance marketing toward content-driven platforms, including RedNote, with more emphasis on building consumer engagement before transactions. He said Baozun’s end-to-end capabilities allow it to help brands allocate budgets across content, performance marketing and sales channels. Wu also discussed artificial intelligence, saying Baozun is using AI primarily to improve bottom-line efficiency through automation in areas such as digital asset management and customer service. On the revenue side, he said AI is being used to support operating teams with competitor data, digital analytics and decision-making assistance. Qiu said Baozun expects margin trends to improve as BBM, which currently has higher margins, contributes more growth to the overall business. He also said synergies between BEC and BBM could create additional margin opportunities with existing brand partners. Responding to a question about future brand acquisitions, Qiu said Baozun will be cautious and selective. He said the company is entering an “acceleration phase” after building its current model over the past three years, and that scale will be an important consideration for future opportunities. Qiu said Baozun will continue to focus on fashion apparel, where it can apply experience gained from operating Gap. He added that new opportunities should be able to bring profit immediately. He said Baozun’s merchandising, marketing and channel capabilities make its model distinct from traditional e-commerce service providers that mainly operate online channels for brands. For BBM’s full-year outlook, Huang said the segment’s 2026 growth objective is above 20%. After delivering 39% revenue growth in the first quarter, he said management is confident BBM can continue delivering growth “in the twenties” in coming quarters. Baozun Inc is a leading pure-play e-commerce solutions provider based in Shanghai, China. The company specializes in helping global and domestic brands establish and manage their online stores across major Chinese platforms, including Tmall, JD.com, and WeChat. By offering a one-stop service model, Baozun enables brand owners to outsource the complexities of digital retail operations and focus on product development and customer engagement. The company's suite of services encompasses store design and setup, digital marketing and promotion, technology integration, order fulfillment, warehousing and logistics, customer care, and data analytics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Baozun Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.