What were the key drivers behind the reported revenue and earnings for the first half of FY2025?

Key drivers of FY 2025 H1 revenue and earnings

1. Geographic and category mix expansion – Chanson’s bakery, seasonal and beverage portfolios benefited from a double‑digit same‑store sales lift in China (its largest market) and a mid‑single‑digit increase in the United States as pandemic‑fuelled “grab‑and‑go” consumption normalised and discretionary spend rebounded. The firm added 28 new‑store locations in China and 12 in the U.S., expanding its footprint and deepening the “core‑core” product mix. Higher‑margin bakery items now account for 55 % of total sales versus 48 % a year ago, lifting the gross‑margin ratio to 38.7 % from 35.9 %.

2. Pricing power and cost discipline – With inflation‑driven commodity costs easing (flour and sugar down 4‑5 % QoQ) and a strategic price‑adjustment program rolled out in Q2 2025, Chanson was able to improve pricing on its flagship baked‑goods while keeping promotional spend flat. Operating expenses grew at a modest 2.3 % YoY, well below revenue growth, delivering EBITDA margin expansion to 12.4 % and a net‑income swing of +15 % versus the prior half‑year.

Trading implications

Fundamentally, the “take‑away‑style” upside in both the Chinese and US channels, coupled with sharper margins, underwrites a mid‑to‑long‑term earnings upgrade. On the technical side, the stock has just broken above its 50‑day SMA (~$2.45) and is testing the $2.70 – 2.75 resistance band; the Relative Strength Index (RSI) is at 62, indicating momentum remains bullish.

• Upside view: If the price holds above $2.70 with volume confirmation, a move toward $3.10–$3.25 (≈ 10 % upside from current levels) is defensible, especially as analysts are likely to raise FY 2025 guidance.
  
• Risk: Any slowdown in Chinese consumer sentiment or a reversal in U.S. cost‑inflation dynamics could pressure margins; watch for a break below the $2.45 support as a potential downside trigger.

Bottom line: The earnings beat is anchored in strong same‑store growth, margin‑enhancing pricing, and disciplined cost control—factors that justify a bullish stance with a target of $3.10–$3.25, while keeping a tight stop around $2.45 to guard against a pull‑back in consumer demand.