Boqii's Financial Performance Shows Resilience Amidst Market Challenges

Boqii Holding Limited, a prominent name in China's pet-focused sector, has recently made headlines by announcing its unaudited financial results for the first half of fiscal 2026. The results reflect both achievements in operational efficiency and the ongoing struggles of the market.

Key Financial Highlights

For the six months ending on September 30, 2025, Boqii reported total revenues of RMB 207.9 million (approximately $29.2 million). This marks a decline from RMB 249.7 million recorded in the same period of the previous fiscal year. However, an important takeaway from the report is the enhancement in gross margin, which increased to 25.9%, showing a significant 520 basis point improvement compared to 20.7% for the first half of fiscal 2025. This increase is attributed to more focused efforts on private label products, which saw a rise in both the number of SKUs and gross margin.

The loss from operations also showed a favorable trend, decreasing to RMB 16.9 million (approximately $2.4 million), a reduction of 37.4% from RMB 27.0 million in the previous fiscal year. Additionally, Boqii's net loss significantly dropped to RMB 7.4 million (about $1.0 million), demonstrating a remarkable decrease of 75.1% amid challenging consumption sentiments.

Operational Adjustments

Mr. Hao Liang, the company's founder and CEO, acknowledged the company's strategic focus on maintaining profitability despite declines in revenue. Underlining the success of its private label strategy, the number of SKUs has increased from 3,546 in the previous fiscal first half to 4,427 this fiscal period. Consequently, the gross margin for private labels surged to 44.5%, which is up by 1,130 basis points from the prior year.

To drive further efficiencies, Boqii implemented a more capable supply chain management approach, optimizing fulfillment processes through expanded fulfillment center usage. This change resulted in a notable 31.0% reduction in fulfillment costs as a percentage of revenue, moving from 7.5% to 6.2% year-over-year. The operational improvements led to a significant rise in the post-fulfillment gross margin, which escalated from 13.3% to 19.7%.

Insights from Management

In her remarks, Yingzhi (Lisa) Tang, Boqii's Co-Founder, Co-CEO, and CFO, expressed confidence in the company's strategic advancements and continued dedication to delivering value to both consumers and investors. She emphasized that even though the total revenues reflected a downward trend, the focus had shifted towards enhancing profit margins rather than merely increasing sales volume.

This strategy aims to solidify Boqii's long-term growth prospects while navigating the complex market environment. Boqii actively seeks to create sustainable growth, aiming to endure through economic uncertainties while improving its profitability metrics.

Conclusion and Looking Ahead

Despite facing tough market dynamics and a shift in consumer behavior, Boqii Holding Limited's latest financial outcomes exhibit a resilient stance and strategic foresight. With plans to continue optimizing its operations and amplifying its product offerings, the company is set on a path to navigate the fiscal landscape. The results suggest that while the road ahead may be challenging, Boqii is committed to its vision of thriving in the pet industry and enhancing the lives of pet lovers in China.