2025 Aug 28
AEON Stores (Hong Kong) Co., Limited

AEON STORES ANNOUNCES 2025 INTERIM RESULTS ACTIVELY RESPONDS TO MARKET CHANGES CONTINUOUSLY ADJUSTS BUSINESS STRATEGIES

AEON Stores (Hong Kong) Co., Limited ("AEON Stores" or the "Group" ; Stock code: 984) has today announced its interim results for the six months ended 30 June 2025. In the first half of 2025, the economies of Hong Kong and Mainland China were gradually recovering. However, due to high interest rates, the continued decline in the real estate market, and the impact of the Sino-US trade war, consumer confidence in both regions remained sluggish, weighing on the overall performance of the retail market. In response to the rapidly changing market environment, the Group actively adjusted its business strategy and implemented internal reforms to lay a solid foundation for sustainable development.

For the six months ended 30 June 2025, the Group's revenue decreased by 3.0% year-on-year to HK$3,930.7 million (2024 1st half: HK$4,052.1 million). Gross profit margin was 28.0% (2024 1st half: 28.4%), while loss attributable to owners of the Company amounted to HK$217.4 million (2024 1st half: loss of HK$171.2 million). The Group maintained a strong financial position with cash and bank balances and short-term deposits totaling HK$814.9 million as at 30 June 2025 (31 December 2024: HK$830.6 million).

Mr. Takenori Nagashima, Managing Director of AEON Stores, said, "In the first half of 2025, the global political and economic environment remained complex and volatile, posing numerous uncertainties for the Group's overall operations. In response, we actively pursued business reforms, continuously increasing the proportion of our private brands. We adopted diversified and differentiated product strategies to cope with intense market competition. Furthermore, the Group accelerated its digital transformation and e-commerce deployment. Through various structural reforms and cost control measures, we enhanced operational efficiency. The Group also proactively identified changes in customer needs and market trends to further optimize the store network in Hong Kong and the Greater Bay Area (GBA), aiming to achieve sustainable development. We have observed that the Hong Kong business has undergone structural adjustments and operational challenges, and has now reached a turning point. Operational efficiency continues to improve, indicating that the most difficult period is behind us, and the business is expected to gradually move towards recovery.”

Hong Kong Operations

In the first half of 2025, Hong Kong's overall consumption remained weak. In addition, multiple structural factors, including the ongoing boom in both northbound and outbound travel of Hong Kong residents, the accelerated entry of e-commerce platforms from Mainland China into the Hong Kong market, and changes in the consumption patterns of inbound tourists, also continued to affect the performance of Hong Kong's retail industry, posing challenges to the Group's Hong Kong operations. During the period under review, the Group continued to improve its procurement strategies and strengthened its product reform efforts to offer a more diverse range of products that cater for consumer needs and attract new customers. This included increasing the proportion of products under its private brands, such as TOPVALU, HÓME CÓORDY, PEACE FIT WARM/COOL, SELF SERVICE, and the newly launched the Group's first overseas women's fashion brand ESSEME, to boost sales profitability. In the first half of 2025, sales of the Group's private brands increased by approximately 30%. The Group actively capitalized on the booming IP character economy by launching a product line featuring the highly popular Japanese cartoon character“Opanchu Usagi”, which won the favor of many customers. Additionally, the Group expanded the range of products directly imported from Japan and Southeast Asia and organized themed promotional events such as the "Vietnamese Fair" to meet customers' demand for exotic tastes.

During the period under review, the Group continued to actively optimize its store network. This included the grand opening of AEON STYLE Kai Tak and the reopening of AEON STYLE Kornhill with a new look, offering diversified products, services and experiences tailored to the evolving needs of different target customers. Additionally, the Group strived to expand into different formats, especially small specialty stores such as Mono Mono, DAISO Japan and Living PLAZA by AEON, to increase profitability.

In response to market challenges, the Group implemented structural reforms to align with its strategic transformation. During the period under review, the Group adopted strategies such as optimizing human resource allocation, actively negotiating with landlords to reduce store rental costs, focusing on opening small specialty stores, and improving product management efficiency to address daily operational issues while maximizing benefits. In addition, the Group improved warehousing and logistics efficiency.

As for digital transformation and e-commerce, the Group expanded and optimized the application of electronic price tags, self-checkout systems and the“Mobile Assistant”during the period under review, which reduced inventory update times and streamlined checkout processes, further demonstrating its commitment to improving operational efficiency. In terms of sales, leveraging precise market positioning in the online space, the Group's online platforms, particularly the AEON App, achieved sales growth in the first half of 2025.

During the first half of the year, revenue from the Group's Hong Kong operations decreased by 5.97% to HK$1,784.1 million (2024 1st half: HK$1,897.4 million), and incurred a loss of HK$162.0 million (2024 1st half: loss of HK$144.3 million). However, if foreign exchange factors are excluded, the Hong Kong operation's adjusted loss for the period would be HK$140.8million (2024 1st half: adjusted net loss of HK$155.6 million), representing a 9.5% improvement compared with the same period last year.

Mainland China Operations

Owing to a series of proactive consumption stimulus policies introduced by the Chinese government, Mainland China's economy recovered steadily, but overall deflationary pressure remained. During the period under review, the gross profit margin of the Mainland China operations increased slightly, mainly due to the substantial increase in sales of its private brands. Online sales also recorded a year-on-year increase, demonstrating the success of the Group's e-commerce deployment. The Group responded flexibly to market changes and capitalized on the surge in“northbound”consumption by Hong Kong residents. During the Period under review, the Group opened five new stand-alone supermarkets, including Shenzhen Longgang Renheng Store, Foshan MixC Store, Guangzhou Hengbao Store, Guangzhou Lingzhan Store and Guangzhou Chengguanghui Store, which continuously won the favor and support of new and loyal customers in the GBA and further expanded the Group's presence in the GBA market. In addition, the Group actively reviewed the performance of each store, closing the Shenzhen Bao’an Store and completing the contract renewal of the Guangzhou Tianhe Store to adjust the store network layout and improve overall efficiency.

Revenue from the Mainland China operations in the first half of the year decreased slightly by 0.4% to HK$2,146.6 million (2024 1st half: HK$2,154.7 million), with a loss incurred amounting to HK$66.1 million (2024 1st half: loss of HK$37.0 million).

Prospects

Regarding the Hong Kong operations, the Hong Kong government has actively organized a series of major cultural and sports events, implemented various measures to attract tourists, and also actively assisted the retail industry in adapting to market changes and shifts in tourist consumption patterns in various ways, to help companies improve their local sales capabilities. However, the Sino-US trade war brought uncertainties to the second half of the year, and the unclear economic outlook continued to affect consumer confidence. Additionally, the shift in consumer spending patterns slowed the retail industry's recovery, and the popularity of outbound travel and online shopping among Hong Kong residents made it even more difficult for consumption related to the local population to see significant improvement in the short term.

In the face of a constantly changing economic environment, the Group will continue to implement the following strategies to ensure business resilience and seize opportunities in the second half of the year. First, the Group will continue to advance product reform to increase sales of its private brands with higher gross profit margins. At the same time, the Group will seek more suitable cartoon IP brands for collaborative sales, optimize its product portfolio, and increase the import of goods directly from regions such as Japan and Southeast Asia to enhance its competitiveness through product differentiation.

The Group will also continue to increase its investment in digital transformation and e-commerce. For example, the Group will introduce smart shopping carts and AI loss prevention systems. At the same time, it will focus on optimizing membership management and launch a joint membership program with mainland companies to improve operational efficiency, promote sales, and provide customers with a more convenient and enjoyable shopping experience. The Group's WeChat Mini Program was launched in July to help attract more mainland customers to shop in-store and become Hong Kong AEON members. In addition, the Group plans to launch more smart retail solutions with its partners and will formally deepen its collaboration with AEON Credit Service under the proposed new bonus point platform in the future, creating greater synergy and helping drive sales and enhance customer loyalty.

Regarding store operations, the Group focused on expanding its small specialty store business, including brands such as Mono Mono, Living PLAZA by AEON and DAISO Japan. By leveraging flexible locations, relatively low rental costs, and a high-value product mix, the Group achieved cost savings and increased sales, thereby ensuring overall profitability. The Group opened the DAISO Japan North Point WORFU Store in July, further expanding its reach to more diverse consumer groups and needs. In July and August, the Group opened lifestyle specialty stores“Mono Mono”in Ngau Tau Kok and Tai Po Tai Yuen, offering a wide range of AEON’s private brand products, including TOPVALU, HÓME CÓORDY and DAISO Japan products, and a variety of exclusive items directly imported from Japan and other regions.

The Group will continue to review and adjust its current operational and management systems, aiming to control costs and improve operational efficiency and productivity with meticulous financial management. The Group will further optimize logistics costs, and it has also introduced TOPVALU vending machines and plans to accelerate their deployment into more suitable stores. These machines will help the Group control labor costs while boosting sales performance. The Group will open at least three Mono Mono stores and one DAISO Japan store in the second half of the year, as planned, to strengthen the competitive advantage of its retail network in Hong Kong.

Regarding the Mainland China operations, while the economic environment in Mainland China remains uncertain, the Group is cautiously optimistic about its business development prospects in the country. As the Chinese economy steadily recovers, various consumption stimulus measures introduced by the government are expected to effectively stimulate retail demand and create growth opportunities, particularly in key regions such as the GBA. In addition to the above strategies, the Group will continue to accelerate the expansion of its business footprint in the GBA and proactively seize the opportunities presented by the trend of“northbound travel”among Hong Kong residents. The Group expects to open three AEON stores, including Guangzhou Panyu K11 Store, Jiangmen Lihe Store, Canton Tower Plaza Store, in the GBA as planned in the second half of the year to further expand its store network and retail coverage in the region.

Mr. Takenori Nagashima concluded,“Although factors such as China's economic slowdown and intensified global trade tensions will continue to impact retail market performance in the second half of the year, we believe that a series of consumption-stimulating policies by the Mainland China and Hong Kong governments, combined with the approaching U.S. interest rate cut cycle, will help improve the retail environment. The retail industry is undergoing significant adjustments. The increasingly competitive landscape is driving us to accelerate internal reforms and transformation, which we believe will inject strong momentum into our long-term development. We will proactively respond to changes while upholding our customer-centric philosophy of‘everything we do, we do for our customers.’By offering a diverse range of high-quality products and services, we will highlight our competitive advantages, provide customers with a pleasant shopping experience, and continuously enhance the influence of the AEON brand.”

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About AEON Stores
AEON Stores was established in Hong Kong in 1985 and listed on the Hong Kong Stock Exchange in 1994. The Group is mainly engaged in the operation of general retail businesses (General Merchandise Stores and Independent Supermarkets). Currently, it operates 10 GMS, 3 independent supermarkets, 28 independent Living PLAZA by AEON, 29 independent DAISO Japan, 6 Mono Mono, 6 KOMEDA'S Coffee and 1 JELYCO DO By KOMEDA'S Coffee in densely populated districts in Hong Kong. It also operates 20 GMS and 22 independent supermarkets in Guangdong Province, the PRC.

For more information：
AEON Stores (Hong Kong) Co., Limited
Corporate Communication Department
Tel.：（852）2165 0777
Email：[email protected]