After a sharp decline in net profit, facing growth bottlenecks again, Goodbaby International's transformation enters deep water.

May 12, Goodbaby International (01086.HK) released its Q1 2026 financial report. During the period, the Group achieved revenue of HKD 2.166 billion, up 6.4% year-on-year.

However, calculated on a constant-currency basis, the revenue for this period actually fell slightly by 0.9% year-on-year. The “scissor gap” of more than 7 percentage points between apparent positive growth and actual negative growth reflects the “cosmetic” effect of foreign exchange fluctuations on reported revenue.

After stripping out the currency tailwinds, amid macro headwinds of weak global spending on baby and children products, the Group’s actual business delivery volume did not achieve any substantive expansion.

Breaking down the fundamentals, the Group’s revenue is accelerating its shift toward concentration on a single leading brand.

As the absolute core engine at present, the strategic brand CYBEX reported Q1 revenue of HKD 1.293 billion, up 12.9% year-on-year, continuing the inertia of high-level growth seen earlier. With its mid-to-high-end positioning and omnichannel setup, CYBEX continues to capture market share even in a difficult environment.

But the other side of the coin is that this brand’s revenue share has nearly approached 60% of the Group’s total. Once demand resilience in the high-end markets of Europe and the U.S. hits its peak, or if the brand’s innovation momentum slows down, the Group’s overall performance will face a large volatility risk that is deeply tied to a single brand.

By comparison, the other two core brands are undergoing in-depth strategic adjustments.

Evenflo, mainly targeting North America, saw Q1 revenue rise slightly by 3.1%. After experiencing double-digit declines in 2025, it has released an initial signal of stabilization. The DTC strategy drove a rebound in the stroller and home goods categories, but competition in the North American market is fierce, and past burdens still need time to be digested.

In the Group’s China home market, the gb brand’s revenue recorded a slight decline.

Since 2025, gb has proactively cut low-margin and outdated product lines, focusing its resources on core durable goods such as car seats. Although growth in individual product categories has remained strong and the profit structure has been optimized, in the short term, this incremental expansion still cannot fully fill the revenue vacuum left by clearing out low-end categories.

In addition, the Blue Chip OEM business declined in Q1.

Management attributed this to the high base effect arising from customer orders being brought forward in the same period last year, which also indirectly confirms the Group’s long-term strategy of “prioritizing brands over OEM.”

What is worth watching is that, when extending the observation period, although the Group’s gross profit margin remains at a healthy level above 51%, high operating expenses, supply chain costs, and raw material costs are continuously eroding final profits. In 2025, the full-year net profit attributable to shareholders fell by more than 38%. Improvements to the revenue structure have not been smoothly translated into greater net profit.

Overall, Goodbaby International’s first-quarter results show a typical “structural divergence,” with CYBEX playing the role of a performance ballast, barely managing to offset the transition pains of gb’s turnaround and the cyclical pullback in the OEM business.

In the current environment where the global infant and child durable goods market has fully entered a contest for existing demand, the 0.9% negative growth under a constant exchange rate regime has sounded an alarm. How to control rigid spending while accelerating the substantive bottoming-out rebound of Evenflo and gb is a long-term question that management urgently needs to answer.

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