• Total Net Revenues: Increased by 8% year over year to RMB3 billion in Q4 2024.
• E-commerce Revenue: Grew 6% to RMB2.5 billion.
• Brand Management Revenue: Increased by 17% to RMB535 million.
• Services Revenue: Increased by 9% year over year to RMB1.9 billion.
• Online Store Operations Revenue: Increased by 16% year over year.
• Digital Marketing and IT Solutions Revenue: Grew by 15% year over year.
• Gross Margin for Product Sales: 30% at the group level.
• Adjusted Income from Operations: RMB103 million, a 37% improvement from a year ago.
• Non-GAAP Net Income Attributable to Shareholders: RMB46 million, a 59% improvement year over year.
• Cash and Cash Equivalents: RMB2.9 billion as of December 31, 2024.
• Number of Brands in Portfolio: Expanded to over 490 by the end of 2024.
• Same-Store Sales: Increased for the second consecutive quarter.
• New Store Openings: 40 new stores in the second half of 2024, including 16 in Q4.

• Warning! GuruFocus has detected 2 Warning Signs with BZUN.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Baozun Inc (NASDAQ:BZUN) achieved an 8% year-over-year revenue growth in the fourth quarter of 2024.
• The e-commerce division saw a substantial 16% increase in non-GAAP operating profits.
• Baozun E-commerce resumed annual top-line growth after two years of contraction.
• The company expanded into emerging channels like Douyin, Rena, and WeChat, achieving a 16% year-over-year increase in online store operations revenue.
• Value-added services, including digital marketing and IT solutions, grew by 15% year over year.

Negative Points

• The gross margin for e-commerce product sales decreased to 10.8% from 12.4% a year ago due to a change in category mix.
• Gross margin for Baozun Brand Management (BBM) decreased to 50.4% from 52.9% a year ago due to higher discounts during quarterly Gap promotions.
• The BEC product sales revenue decreased by 4% year over year, mainly due to the weak performance of the appliance category.
• Cash and cash equivalents decreased to RMB2.9 billion from RMB3.1 billion a year ago.
• The company faced challenges in the macroeconomic environment, impacting same-store sales growth.

Q & A Highlights

Q: Have management observed any improvement in consumer consumption sentiment over the past two months, especially with government support measures and promotional activities? What is the expectation for 2025 growth and key drivers? A: Junhua Wu, Co-Founder and Director, noted that consumer sentiment has improved, particularly during recent promotional events like Queen's Day. Categories such as home appliances have seen rapid growth, supported by government subsidies. The company expects continued positive momentum in consumer sentiment. Wu's focus is on optimizing team structures and financial management to enhance profitability and growth.

Q: Can management update us on Gap China's same-store sales growth and performance of other brands under BBM? A: Ken Huang, CFO of BBM, reported low single-digit same-store sales growth for Gap in Q4 2024. Hunter, although a smaller contributor, experienced over 100% same-store growth. New store expansions in tier-one and tier-two cities have shown promising results, with strong sales per square meter.

Q: How should Baozun expect the potential influence of changing competitive landscape in the e-commerce sector, especially with changes in merchant policies from platforms like Douyin? A: Junhua Wu explained that Douyin's GMV growth is outpacing other platforms, and Baozun is benefiting from reduced commission rates in categories like fashion and luxury. The company is expanding services on Douyin and integrating traffic across platforms like Tmall and JD to leverage its omnichannel strategy.

Q: With more consumption stimulus policies rolling out, how should we look at the consumption recovery trend in 2025? A: Junhua Wu stated that while each brand has different strategies, Baozun maintains a positive outlook for 2025, expecting growth in GMV, revenue, and operational profit. The company serves over 400 brands, each with unique expectations and strategies.

Q: What is Baozun's strategy in the fashion apparel category on JD.com, and how does the company view the rise of AI tools in business applications? A: Junhua Wu highlighted that Baozun will leverage its expertise in fashion apparel to support clients on JD.com. Regarding AI, Baozun is using AI to enhance efficiency and drive growth, with applications in customer service, product management, and internal operations. AI is seen as a key driver for future business improvements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.