Baozun, Inc. Q4 FY2024 earnings call

• Vincent Qiu reported Baozun executed three-year transformation plan with strong momentum, 8% Y/Y revenue growth in Q4, e-commerce non-GAAP operating profits up 16%, BBM operating loss narrowed 20%. Annual non-GAAP operating profit breakeven met with positive cash flow. • Arthur Yu noted e-commerce maintained 6% Y/Y revenue growth and 16% non-GAAP operating profit improvement, brand portfolio expanded to over 490, omni-channel adoption in store operations increased, key categories performed well, launched Douyin Business Intelligence, received Douyin Ecommerce Diamond Brand Service Provider Award. • Ken Huang reported BBM sustained 17% Y/Y sales growth, same store sales up for second quarter, offline revenues grew for first time since acquisition, opened 40 new stores in 2024, plans to open ~50 new stores in 2025, refined product localization for Gap, aligned marketing with culture trends.

Baozun Group achieved 8% year-over-year revenue growth in the fourth quarter. E-commerce division saw 16% increase in non-GAAP operating profits, with e-commerce revenue growing 6% to RMB 2.5 billion in Q4. BBM revenue grew 17% to RMB 535 million. E-commerce product sales revenue decreased 4% due to appliance category, while BBM product sales grew 17% led by Gap brand. On an annual basis, group total revenue was RMB 9.4 billion, up 7% year-over-year, with e-commerce net revenues RMB 8.1 billion (up 6%) and BBM net revenues RMB 1.5 billion (up 16%).

• 2025 marks strategic transformation phase, strengthening senior management team. • BBM plans to accelerate store expansion, open ~50 new stores in 2025. • Leverage AI in creative content, technologies, and marketing to drive efficiencies and growth. • Optimize business structure, including DC and consignment models, and enhance omni-channel strategies.

• Forward-looking statements involve known and unknown risks, uncertainties, and factors beyond the company's control that may cause actual results to differ materially from forward-looking statements. Risks detailed in company filings with US Securities Exchange and Hong Kong Stock Exchange.

Q: Related to consumer consumption sentiment, improvement over past two months, 2025 growth drivers, and benefits from smartphone trading subsidy. Also about Gap China's same-store sales and Mr. Wu's key initiatives.

A: Junhua Wu noted good consumption sentiment during Queen's Day, expecting higher momentum, focused on bottom line optimization and top line same store growth, leveraging AI. Ken Huang said BBM sales growth from same store and new stores, Gap same store had low single digit growth, Hunter grew rapidly.

Q: About competition from e-commerce platforms changing merchant policies and consumption recovery trends.

A: Junhua Wu said Douyin commission changes benefit categories like fashion, consumption outlook varies by brand, but high expectation for 2025 growth.

Q: JD.com's investment in clothing category and view on AI tools.

A: Junhua Wu said Baozun will help clients move business to JD.com in fashion apparel, leveraging AI for efficiency in customer service, product management, and marketing, using AI in various internal and business processes.

Q: RedNote plans.

A: Junhua Wu said RedNote is used to drive customer journey, focusing on content to create emotion linkage before transactions, using AI to drive promotions and target consumers.