Q2 2026 Baozun Inc Earnings Call Transcript
Key Points
- Baozun Inc (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.
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.
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. They 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. Qiu will
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