AEON Stores (Hong Kong) Co., Ltd. reported a deeper operating strain for FY 2025 as weaker topline growth and a heavier cost base outweighed modest improvements in Hong Kong results.

Key financials • Revenue slipped 3.70 % to HK$7.80 billion, with Hong Kong sales down 4.10 % to HK$3.59 billion and Chinese Mainland sales down 3.40 % to HK$4.20 billion. • Group gross profit margin contracted 50 bp to 28.4 %. • Loss attributable to shareholders narrowed 4.10 % to HK$324.35 million; total comprehensive loss reached HK$326.79 million. • Adjusted EBITDA1 turned more negative at a HK$283.73 million loss versus a HK$246.65 million loss a year earlier. • Net current liabilities widened to HK$1.56 billion (2024: HK$1.20 billion). • Cash and short-term deposits fell to HK$608.80 million from HK$830.60 million. • No final dividend declared.

Segment performance Hong Kong: Revenue decline moderated, but the segment still booked a HK$192.36 million loss (2024: HK$288.16 million). Chinese Mainland: Revenue softened to HK$4.20 billion, and the segment loss rose to HK$159.73 million from HK$65.86 million.

Cost dynamics • Staff costs fell 12.10 % to HK$847.92 million, representing 10.9 % of revenue (2024: 11.9 %). • Lease-related depreciation and expenses totalled HK$708.99 million, easing 3.50 %. • Other operating expenses edged up 1.20 % to HK$1.05 billion, lifting their revenue ratio to 13.5 %.

Liquidity and leverage • Year-end loans from the ultimate holding company, AEON Co., Ltd., stood at HK$416.36 million; maturity has been extended from February 2026 to February 2027. • Gearing, defined as the loan balance divided by total deficit, was ‑52.98 %. • Auditors highlighted a material uncertainty relating to going concern, citing recurring losses and sizeable net current liabilities; continued group support from the parent is assumed in management’s cash-flow forecasts.

Capital expenditure and outlook FY 2025 capex totalled HK$183.40 million for new stores, refurbishments and IT upgrades. Management expects 2026 capex of about HK$110.84 million, focusing on specialty-store rollout in Hong Kong (10 Mono Mono outlets) and three new supermarkets in South China. Digital transformation, private-label expansion and supply-chain optimisation remain core initiatives.

Note 1: Adjusted EBITDA = loss for the year plus tax, net finance costs, depreciation of fixed assets/right-of-use assets/investment properties, lease repayments, and selected non-cash items.