Seven Wolves' Net Profit Fell By 25% In The Third Quarter, And The Clothing Industry Remained Sluggish

Seven Wolves announced the third quarter report of 2013, and for two consecutive quarters, both operating income and net profit have declined year on year. Even so, Seven Wolves is favored by funds because of the favorable O2O model (Online To Offline). With the disclosure of the third quarter reports, clothing The downturn in the industry has not abated. The industry believes that the sharp increase in accounts receivable, the decline in gross profit margin, and high inventory will continue to lead to performance pressure, while the pulling effect of O2O mode may come later.

O2O concept incentive fund is favored

According to the latest report of the third quarter of 2013 released by Seven Wolves, the operating revenue and net profit of the company during the reporting period were 887 million yuan and 116 million yuan respectively, down 13.66% and 25.63% year on year respectively; From January to September this year, the operating revenue was 2.31 billion yuan, and the net profit was 327 million yuan, down 8.11% and 7.35% year on year respectively. The revenue and net profit have declined for two consecutive quarters, and the month on month decline has intensified. As mentioned in the third quarter report, the annual net profit is expected to decline between 0% and 30%.

It is worth noting that the seven wolves with poor performance are favored by the fund. In the list of top ten circulating shareholders, 7 were occupied by the fund, of which Everbright Prudential Credit Quantitative Core added 14.3 million shares in the third quarter, accounting for 2.59% of the circulating shares at present, ranking the third largest circulating shareholder, and Haifutong selected 998000 shares, accounting for 0.91%; The return of CNOOC Energy Strategy and Great Wall Ease was 10.645 million shares, which were newly built in the third quarter; In addition, the National Social Security Fund 502 portfolio, the National Social Security Fund 109 portfolio, and the National Social Security Fund 111 portfolio hold shares. The seven funds together accounted for 7.83%. At the end of the second quarter, the fund held only 7.46% of the shares.

In fact, clothing concept stocks in the third quarter were all popular, which came from the stimulation of O2O concept. Seven Wolves, Pathfinder, Meibang Clothes & Accessories They have set foot in O2O models such as "online trading, offline picking up", "goods+services", "online sales+experience stores", etc. Although their performance is different, they have received considerable attention. According to the published third quarter report, clothing stocks, including Seven Wolves, Pathfinder and Nine Muwang, have been supported by funds.

The surge of accounts receivable has become a common phenomenon

Under the influence of the deterioration of economic fundamentals, factors such as the continuous decline of gross profit rate, the sharp increase of inventory and accounts receivable are still the hidden worries of garment enterprises. In the third quarter, the gross profit rate of seven wolves was 45.07%, down 2.5 percentage points month on month. The sales expense rate and management expense rate in the first three quarters both rose to 13.5% and 7.7%. At the end of the reporting period, accounts receivable surged by 56.62% to 959 million yuan. In this regard, Septwolves said that the increase in accounts receivable was due to the fact that the company gave more credit lines to agents to ease the pressure on channel funds during the peak shipment period. In addition, the company's inventory increased to 667 million yuan at the end of the third quarter, which also led to an increase of 60.15% to 130 million yuan in asset impairment losses due to the provision for inventory depreciation. In fact, the above problems also exist in garment enterprises that have published their third quarter reports. Although Toread's performance soared in the third quarter, its accounts receivable soared by 43.82% compared with the beginning of the year, its inventory increased by 157.03%, and its gross profit margin fell by 0.82 percentage points in the first three quarters; In the third quarter, the receivables of Meibang Clothing increased by 74.21% month on month, and the inventory increased by 32.53%; Jiumuwang's inventory slightly increased by 7.8% compared with the first half of the year.

According to the analysis, the surge of inventory and accounts receivable is a common problem faced by the clothing industry this year due to the downturn of terminal sales. The good effect of online and offline coordinated development brought by O2O mode will take some time, and is expected to achieve results early next year.