Baozun Inc. (BZUN) Q2 2025 Earnings Call Transcript

Total Revenue Total revenue grew by 7%. Excluding one-off expenses, adjusted operating income expanded to CNY 59 million, a significant improvement from CNY 10 million in the same period of last year. This demonstrates resilience in the business model and profitability expansion.

BEC Revenue BEC revenue grew by 3%, while adjusted operating profits rose 56% year-over-year to CNY 94 million, the highest second quarter level in 4 years since the pandemic. This improvement is attributed to disciplined execution and adapting to evolving market needs.

BBM Revenue BBM revenue grew 35% year-over-year, up from 23% in the previous quarter. This growth was driven by merchandising, channel expansion, and marketing initiatives for Gap, as well as strong performance in offline stores.

Baozun Group's Total Net Revenues Total net revenues increased by 6.8% year-over-year to CNY 2.6 billion. E-commerce revenue grew by 3.4% to CNY 2.2 billion, while brand management revenue rose by 35.4% to CNY 398 million. Growth was driven by digital marketing, IT, online operations, and strong performance in beauty, cosmetics, and alcohol categories.

Gross Margin for Product Sales Blended gross margin for product sales at the group level was 28.4%, an expansion of 310 basis points year-over-year. Gross profit increased by 28.1% year-over-year to CNY 283 million. Margin expansion was driven by product mix diversification.

Fulfillment Cost Fulfillment cost for the quarter was reduced by 3.3% to CNY 606 million, reflecting ongoing cost optimization efforts.

Sales and Marketing Expenses Sales and marketing expenses increased by 11% to CNY 938 million, mainly due to higher spending on creative content, performance-driven digital marketing during the 618 e-commerce campaign, and increased front-end expenses from expanding BBM's offline network.

Technology and Content Expenses Technology and content expenses decreased by 11.7% to CNY 150 million due to enhanced monetization efficiency.

G&A Expenses G&A expenses rose 30.7% to CNY 224 million, primarily due to a one-time write-off of CNY 53 million in accounts receivable. Excluding this write-off, G&A remained flat compared to the same period last year.

Non-GAAP Income from Operations Non-GAAP income from operations was CNY 6.1 million. Excluding the CNY 53 million nonrecurring provision, adjusted non-GAAP income from operations was CNY 59 million, a sharp improvement from CNY 10 million in the same period of last year.

Cash and Cash Equivalents As of June 30, 2025, cash and cash equivalents, restricted cash, and short-term investments totaled CNY 2.7 billion.

BBM Gross Margin BBM gross margin for the quarter was 52%, relatively flat compared to 52.3% a year ago. Gross profits grew by 34.5% to CNY 208 million.

Inventory Management for BBM Days of inventory reduced to 126 days, representing more than 20% year-over-year improvement. This was achieved through better demand planning, alignment between merchandising and supply chain, and stronger sell-through on core product lines.