Best Mart 360 (02360) reported FY 2025 revenue of HK $2.87 billion, up 2.2% year-on-year, driven mainly by the net addition of seven new stores during the period.

Profit attributable to shareholders fell 10.6% to HK $219.73 million, pressured by a softer gross margin and higher operating costs. Basic earnings per share declined to HK 22.0 cents (FY 2024: HK 24.6 cents).

Gross profit edged up 0.7% to HK $1.04 billion, but the gross margin narrowed to 36.1% from 36.6% a year earlier, reflecting deeper promotions amid intensified competition. Selling and distribution expenses rose 3.2% to HK $657.46 million, equivalent to 22.9% of revenue, while administrative and other expenses expanded 18.2% to HK $98.90 million, partly due to higher staff costs and a HK $5 million charitable donation.

Operating profit slipped 10.4% to HK $280.99 million. Finance costs decreased 5.7% to HK $17.03 million as the company trimmed bank borrowings to HK $60.00 million, lowering the gross gearing ratio to 11.1%. Net profit margin stood at 7.7%, down from 8.8% in FY 2024.

The board proposed a final dividend of HK 9.0 cents per share, bringing the full-year payout to HK 20.0 cents (FY 2024: HK 21.0 cents).

Balance-sheet metrics remained solid: • Cash and bank balances: HK $173.13 million • Net current assets: HK $151.21 million • Inventories: HK $316.84 million, down 6.7% year-on-year

Operational highlights: • Store network: 183 outlets (178 in Hong Kong, 5 in Macau) versus 176 a year earlier. • Rental expense (cash basis): HK $274.81 million, 9.6% of retail revenue. • Membership base increased 5.1% to approximately 2.40 million. • Private-label sales reached HK $520.82 million, accounting for 18.2% of total revenue.

Management signalled a “moderate expansion” strategy, targeting a net addition of around 10 stores annually in Hong Kong and Macau while prioritising product-mix optimisation and cost control to navigate a challenging retail landscape.