Channel Optimization Effect, Urban Beauty 2018 Net Profit Rose 19%

In March 27th, 02298.HK, the lingerie giant, released its 2018 earnings report.

The report shows that in the year ended December 31, 2018, the income of urban beauty increased by 12.2% to 5 billion 96 million yuan, up 15.4% to 484 million yuan in operating profit, and 19.31% to 378 million yuan in net profit growth, but the gross profit margin dropped to 41.7%.

Urban beauty reported in the earnings report that the rapid improvement of group performance was mainly due to the sales performance of franchisee sales and e-commerce channels.

Among them, sales to franchisees rose by about 15.1%, mainly because the group promoted franchisees to refurbish stores, and the quality of products improved; the sales of self operated stores dropped by about 4.6%, mainly because the group took the initiative to adjust sales and distribution channels in 2017, closing many stores that recorded losses, resulting in an average number of self operated stores in 2018 lower than that in 2017; e-commerce sales increased by about 31.2%, mainly because the group continued to invest resources in developing e-commerce sales channels.

During the year, sales of all kinds of products increased.

The sales of pajamas and home wear increased by about 22.3%, mainly due to the promotion of promotional activities, and the optimization of product design and product style.

As of the end of the reporting period, urban beauty set up large entities and online sales platforms in over 330 prefecture level cities across the country.