Margin squeeze
Meanwhile, gross margin contracted 32 basis points (bps) year-on-year, pinched by inflation and a lower share of high-margin apparel sales. To manage these pressures, the company froze prices in its entry-level segment, undertook selective hikes on mid-priced merchandise, and implemented the largest increases at higher price points. These segments account for about 20%, 55%, and 25% of revenue, respectively. Management indicated that further price hikes may not be necessary at this stage.
