Sports Apparel Stocks Outlook &Nbsp; End The Industry'S High Growth Period.
According to Hong Kong media,
PEAK Sports
[2.06-3.29%] (1968) recently announced the same store in the third quarter
Turnover
The growth slowed sharply from 6.2% in the second quarter to 6.2% in the second quarter, and slowed down from 9.5% in the first quarter to 9.5% in the second quarter.
Management has also said that as of the end of August, it has added 470 new branches, and now plans to optimize its sales network. It will open 700 branches next year and close 500 less profitable branches.
Following Lining [7.375.74%] (2331) and China's trend [1.651.23%] (3818), PEAK sports third's sales performance has dropped, so that the problem is no longer confined to one or two companies, and the industry prospect is worrying.
The root cause of the problem is that sports apparel companies have been developing vigorously over the past few years, opening up stores and increasing sales.
Development bottleneck
It was found that a large number of stocks had been accumulated by retailers, which led to the need for the company to repurchase the retailer so as not to affect the next quarter's orders. After that, the company would try to sell the stock of repurchase, most of which were sold at a low price in the hypermarket.
Buy back sale
Vicious spiral
These behaviors are not only harmful to the competitive environment of the industry, but also need to keep pace with other industries, and push discounts in retail markets to attract customers to maintain sales and reduce the gross interest rate of distributors.
If the situation deteriorates further, distributors may ask the sports apparel Brand Company to lower the wholesale price, causing the gross margin to shrink.
Another bad effect is that if the clothing brand often sells at low prices, it will have a long-term impact on the brand image, and it will not be easy to rebuild it.
Who will be willing to buy products that can be found in hypermarkets at a high price?
In the face of industry growth bottlenecks and fierce competition from other casual wear brands, the high growth period of sports apparel companies will come to an end.
Anta sports [7.84-3.80%] (2020), which has always been a good seller, has also been questioned about the possible deterioration of operating data in the coming quarters and the drag on share prices.
To sum up, although the valuation of sports apparel stocks has dropped to a very low level, the industry outlook is still uncertain, so it is not appropriate to win the rebound.
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