Lining Net Profit Fell 80% In The First Half Of The Year

With Lining and trend released semi annual report recently, with Anta, XTEP, 31st degree, PEAK, six domestic companies.

They all handed in the 2012 semi annual report.

Compared with the same period last year, the situation in the first half of this year is even worse. The inventory pressure is not solved and the order volume is reduced. It is estimated that most sports brand sales will continue to decline in 2012.

However, sales of Nike and Adidas have maintained double-digit growth.

As a big agent in China, BELLE international disclosed in the semi annual report that the sales revenue of front-line brands Nike and Adidas increased 14.3% to 5 billion 118 million yuan, while the second-line brands such as Kappa and Puma also increased 3.4% to 632 million yuan.

Five revenue growth is negative.

In the first half of 2012, sales revenue was 832 million yuan, down 29.4% from the same period last year, and net profit of 93 million 642 thousand yuan during the period, down 57.66% from the same period last year.

Trend announced yesterday semi annual report can not escape the nightmare of performance bottom.

Trend semi annual report revealed that the gross profit margin during the period was 50.2%, down 11.1% year-on-year.

The main business Kappa brand business total sales of 600 million yuan, a decrease of 38.71%.

The gross profit margin of China's Kappa brand business fell 10.6% to 53.9%, even from 3119 to 2550 stores.

On the one hand, the trend is affected by the increase in production costs. On the other hand, the group has reduced the sales discount of the over season products in order to speed up the inventory clearance, and has adjusted the dealer's supply policy to further give profits to dealers.

However, compared with the end of last year's performance fell 35.7%, the performance decline has improved.

PEAK's decline is next to trend. PEAK realized the first half of this year.

Income was 1 billion 610 million yuan, down 28.5% compared with the same period last year, and gross profit margin dropped to 37.7%, down 2.2% compared with the same period in 2011.

Xu Zhihua, chief executive of PEAK, admitted that there is no big improvement in the second half of this year. PEAK's priority now is to clean up the stock.

According to Xu Zhihua, PEAK offers 61% off discount to retailers, which is lower than the previous 60 percent off, leading to a decrease in gross margin and gross profit margin.

But at present, PEAK is also considering further increasing the discount of terminals. It is expected that gross margins will drop further. At the same time, it is expected that the inventory will not be effective until the first and second quarter of next year.

In the first half of this year, sales of Anta, 31st and Lining were negative growth, ranging from -11.62% to 3 billion 930 million yuan, -9.95% to 2 billion 869 million yuan and -9.54% to 3 billion 880 million yuan respectively.

The sales revenue of XTEP in six domestic sports brands increased year by year, but the growth rate was only 1.44% to 2 billion 607 million yuan.

It is worth noting that in the six major domestic sports brands, Lining's net profit decline is the largest, a year-on-year drop of 80% to 62 million yuan.

Although inventories have increased, the reporter has found that some brands are still happy to increase their output. For example, XTEP is still building new factories. In addition to the Fujian Quanzhou factory building with the current utilization rate of 100%, XTEP has bought a piece of land in Anhui Province, and it is expected that the new plant will be put into operation in 2013.

PEAK also said it will invest 80 million yuan in the second half of 2012.

The construction of two existing production facilities and the purchase of new machinery and equipment in Huian county and Jiangxi county to ease the impact of rising labor costs in coastal areas.

At the same time, another garment production facility will be built in Heze, Shandong Province, with an estimated capacity of 30 million pieces per year. The project started in 2011 and is expected to be completed in at least 5 years.

On the contrary, the advertising cost that has attracted much attention has been downgrading. The total cost of the 6 major brands has invested 7 billion 130 million yuan, compared with 7 billion 50 million yuan in the same period last year. The growth rate was not high, because the proportion of advertising expenses, including Anta, XTEP, PEAK and trend, all decreased. The proportion of Anta advertising accounted for 10.4% of sales revenue and 2.2% of the same period, and the advertising cost of the trend dropped more than 100 million yuan to 90 million yuan.

PEAK's sales and distribution costs also decreased by 25.8% to $227 million, mainly due to reduced advertising and promotional activities.

However, the advertising cost of 331 degrees is still in the "great leap forward". The semi annual report shows that its sales and distribution costs have increased by 73.2% to 478 million yuan, mainly because the advertising and publicity expenses share has risen from 6.8% to 13.5%, reaching 661 million yuan.

The advertising costs mentioned are mainly used for the Haiyang 2012 Asian Beach Games, the 2014 Nanjing Youth Olympic Games and the sponsorship of star athletes.

Reporters saw that at present, 31st degree has been signed with Sun Yang, the gold medal winner of the London Olympic freestyle gold medal in recent years. At present, NBA player KevinLove and pole vaulting gold medalist SteveHooker are also their spokesmen.

The number of sponsorship sports teams is 13.

Although the semi annual report shows that Lining's advertising expenses dropped by 2.9 percentage points to 13%, but Lining's advertising expenses this year has apparently not yet been released, Lining said, with the London Olympic Games and other events.

Promotional activities and sponsorship of the Chinese men's Basketball League (CBA) are expected to increase in 2012.

The semi annual report revealed that the CBA sponsorship was signed in June 2012. The agreement covers five seasons from 2012/2013 to 2016/2017. According to media reports, the total sponsorship amount may be as high as 2 billion yuan. In the first half of this year, the advertising cost of Lining was only 504 million yuan.

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High inventory and reduced orders

As of the first half of this year, the total inventory of the 6 brands reached 3 billion 721 million yuan, a slight increase compared with the total inventory of 3 billion 699 million yuan at the end of last year.

Although the stocks of the six major brands declined, the stock of PEAK continued to rise. Compared with the end of last year, the stock had risen to 529 million yuan or 25.65%.

The reduction of orders due to large inventory has become the theme of this year.

From the announcement of the order meeting in the first quarter of 2013, we can see that the amount of Anta's orders has been reduced by 20%-30% per year, XTEP has also decreased by 15%-20%, and PEAK's clothing orders have also recorded a decline in the number of orders.

The trend also indicated that the volume of orders for dealers in each quarter was greatly reduced, and the total number of clothing and footwear sales fell by 43.3% and 31.9% respectively in 2012.

Although the order was not released, the situation of delayed delivery has been delayed in order to solve the problem of inventory adjustment.

In the 31st half year report, it was disclosed that some orders received by distributors in recent two orders have been reduced and some orders have not yet been produced, so as to speed up the clearance of the retail level inventory. At present, the 31st 2012 part of autumn and winter products have been rescheduled in the second half of 2012.

As orders fell, brands also began to reduce wholesale discounts.

XTEP said that since 2013, the wholesale discounts for distributors will be adjusted to 62% from 60% of the proposed retail price in 2012, while the 31st degree will start from 2011 December 2010 in December 2010. The deduction for wholesalers will be adjusted from 60% to 60%, and the July 2011 spring / summer order will be further adjusted to 58% in July 2011.

Since 2012, PEAK has also lowered its deduction to distributors, resulting in a decline in gross margins.

Industry analysts said that the negative impact of high inventory prices is gradually released. Last year, the high inventory situation will affect the sales revenue and business profits of the major brands this year, and their performance will be directly reflected.