Nike, Lining And Other Sports Brands Have Passed The Cost Pressure To Raise Prices.

The sharp rise in material costs and freight rates has brought pressure on many sporting goods companies. Nike And Lining took the lead in expressing the need to raise the price of most products. Lining also made it clear that the price increase should reach two digits.

Nike's latest third quarter earnings report said its revenue grew by 5.2% in the quarter, but the gross profit margin of the company was poor due to the rise in oil, cotton (30255, -20.00, -0.07%) prices, labor costs and freight rates. Nike executives say that the only way to ease the rising cost pressure is to raise prices.

Li Ning Co said that due to the impact of wages and raw material costs, the cost is expected to increase by 20% this year, and the price of products will increase by two digits. Zhang Zhiyong, chief executive of the company, said that the cost of wages this year accounted for 7.5%-8% of the group's total income, which remained the same level as last year, and the wage cost is still controllable. But now that the price of raw materials has risen sharply, the price of cotton has doubled, and the company can only lock in raw material prices in the next 8 months. He expects that the cost will rise by 20% this year.

In addition to the impact of cotton prices, shoemaking enterprises have to deal with the problem of rising prices of major raw materials, petroleum and rubber (34970, -135.00, -0.38%). Guo Lian securities has made a prediction in an investment report, "the price of natural rubber will continue to rise this year". International oil prices have been operating at a high level. Anta has released its earnings or ordering data one after another. Three hundred and sixty-one All enterprises have mentioned "raising the selling price of footwear products" with an average increase of about 10%.

Adidas has not yet made a clear statement of price increase. However, the fourth quarter 2010 earnings showed that Adidas's net profit was only 7 million euros (about 63 million yuan), down 64% from the same period last year. Adidas explained that the main reason is the huge increase in raw materials and other costs.

For the market acceptance of product price increases, Xu Yunfeng, a sports brand analyst, told reporters that the reason for rising costs is too pale for consumers. If enterprises raise prices, they must add additional value to products. Otherwise, the price increase will only drain more consumers, especially for the local low-end brands. "Foreign brand consumer groups may not be too sensitive to price, but Low end brand Consumers may choose other products at a price increase. "

Lining also said that due to the lack of consumer confidence index, coupled with the impact of leisure brands on the sporting goods industry and the impact of this year's lack of major sporting events, the industry growth rate is expected to be affected to a certain extent this year.