On August 19th, according to cailianpress (Reporter Chen Kang), Taiping Bird (603877.SH) returned to the dilemma of double profit decline in the first half of this year. The route of "saving money" in exchange for profits is no longer viable. The company's 2024 interim report released tonight shows that the revenue during the reporting period was 3.146 billion yuan, a year-on-year decrease of 12.66%, and the net profit attributable to the parent company was 0.171 billion yuan, a year-on-year decrease of 31.73%.

Taiping Bird has made efforts to control costs on the cost side, with operating costs of 1.379 billion yuan, a year-on-year decrease of 8.30%, and sales, management, and R&D expenses also decreased by 7.08%, 15.49%, and 1.68% respectively. Among them, the decrease in the number of stores and revenue caused the sales expenses to decrease, and the decrease in employee compensation caused the management expenses to decrease.

Taiping Bird stated that the decrease in revenue was mainly due to the decrease in retail sales during the period, and the decrease in operating income caused a year-on-year decrease of 92.98% in the net cash flow from operating activities.

Cailian News reporters noticed that Taiping Bird's net profit in the second quarter of this year was only 12.43 million yuan, the worst second quarter performance since going public except for the second quarter of 2022.

From the semi-annual report, it can be seen that the profitability of Taiping Bird's brand has dropped across the board, with PEACEBIRD women's wear revenue decreasing by 10.3% year-on-year and gross margin decreasing by 3.54 percentage points; PEACEBIRD men's wear revenue decreased by 6.69% year-on-year, and gross margin decreased by 2.19 percentage points; LEDiN girl's wear revenue decreased by 35.23% year-on-year, and gross margin decreased by 1.25 percentage points; mini peace children's wear revenue decreased by 13.98% year-on-year, and gross margin decreased by 1.09 percentage points.

The profitability of offline channels can reveal the traces of the strategy of "closing inefficient stores and improving the quality of store operations". The operating costs of its directly operated stores decreased by 22.53% year-on-year, and gross margin increased by 1.24 percentage points. However, even so, the revenue of directly operated stores still decreased by 19.15%.

Taiping Bird's store closure strategy is still ongoing, with a net decrease of 47 directly operated stores and a net decrease of 146 franchise stores in the first half of the year, totaling a decrease of 193. In 2023, Taiping Bird will close a net of 940 stores.

Due to the fact that spring and summer sales are mainly dominated by spring and summer styles, which have lower unit prices, the company's monetary funds decreased by 46.02% compared to the end of last year. Accounts receivable decreased by 40.83% compared to the end of last year, and other current assets decreased by 35.86% compared to the end of last year. Due to the higher unit price of autumn and winter styles in the third and fourth quarters, the company's prepaid payment at the end of the first half of the year increased by 77.91% compared to the end of last year.

It is worth noting that at the end of the reporting period, the company's inventory original value was 1.43 billion yuan, a year-on-year decrease of 0.41 billion yuan, a decrease of 22.1%. Taiping Bird stated that the company continued to promote inventory management during the reporting period, on the one hand, strengthening the planned production and sales control of goods, and optimizing new product inventory; on the other hand, strengthening the special mechanism for digesting and processing out-of-season old products to improve the inventory of old products.