Sports Apparel Net Profit Contrast Intensified: Lining Losses Widened To 586 Million Yuan

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The Xiaobian net introduced to you is the increase in net profit margin of sportswear: Lining's losses widened to 586 million yuan.

Under the stimulation of the general orders of several major sports apparel companies this year, the profit of the semi annual report card has not been uniformly restored.

On the side of the box, Lining's semi annual report shows that although its revenue increased by 8% to 3 billion 137 million yuan, but net profit losses widened to 586 million yuan; on the other side, Anta's first half of the year's revenue and net profit rose more than 20%, PEAK's net profit rose more than 35%.

However, the overall recovery of the three listed companies does not mean that the sporting goods industry has been fully recovered.

"Warming up is only an individual business."

CEO Zhang Qing, a sports marketing expert and key Road Sports Consulting Co. Ltd., told reporters in Nandu that the capacity of the industry is still surplus, and that more enterprises will be eliminated.

Net profit losses widened, pformation is still in labor pains

Lining said in the China Daily that in the first half of this year, the group was gradually withdrawing from the non core sports apparel category and the profit free market, and launched a series of initiatives to build brands, reshape business models, develop new products and selectively set up retail outlets.

Under such a move,

The performance in the first half of this year is indeed commendable.

From the half year report, in the first half of this year, Lining's business income increased by 8% to 3 billion 137 million yuan, and gross profit also showed a good growth, an increase of 10.51% to 1 billion 399 million 600 thousand yuan over the same period last year.

But what is more unusual is that its net profit loss has widened to 586 million yuan over the same period last year's loss of 162 million yuan, which even exceeded the 392 million yuan of last year.

"Lining's current profit predicament is inevitable in the process of pformation."

Zhang Qing said.

According to the reports of Nandu journalists, the increase in losses was mainly caused by two significant increases in Lining's distribution expenses and administrative expenses.

Among them, its distribution expenses increased substantially from 162 million 700 thousand yuan to 1 billion 372 million yuan, while administrative expenses increased by 337 million yuan to 494 million 500 thousand yuan.

The increase in distribution expenses is related to Lining's continuous promotion of the establishment of Direct stores in the first half of this year.

Reporters from Lining's report, compared to December 31, 2013, to June 30, 2014, its dealer shops fell 337 to 4552, while the direct store increased by 193 to 1119.

"The number of Direct stores increased substantially compared with the same period last year, and the number of shop operators and managers has increased accordingly, resulting in a substantial increase in staff costs and store rentals."

Lining admitted in the report.

Zhang Qing said that the channel mode of Lining is pforming from wholesale to retail. In this process, the input and integration of terminal retail feedback system hardware, the integration of many small and scattered retailers need to invest funds for old inventory processing.

As for the sharp rise in administrative expenses, it is mainly due to Lining's 92 million allowance for trade receivables and increased cost of staff costs.

Lining, executive vice president and acting chief executive officer Jin Zhenjun, said that a large number of one-time charges totaled 209 million yuan.

In addition to provision for bad debts, it also includes other deferred tax assets, loss of financial assets available for sale, and closure of one-time items in flagship stores.

As a matter of fact, revenue grew in the first half of this year, but the profit loss rate was declining. It seems that Zhang Qing's reform led by Lining two years ago is more difficult than it imagined.

However, Zhang Qing pointed out that for Lining, the pformation from the wholesale and light asset mode to retail oriented is also obliged.

"Next, Lining will still face two pressures. On the one hand, Lining's retailers are small and scattered. In the process of inventory, Lining hopes that they can digest the old inventory as soon as possible, while retailers do not want to lose more quickly because they want to digest the old stock quickly. There is a game between the two sides. On the other hand, Lining introduced many talents and made many reform measures two years ago in product R & D, retail and management, but still needs high internal recognition and forceful implementation.

In response to the difficulties encountered in the past two years of pformation, Jin Zhenjun said the biggest difficulty is that the channel business problem is bigger than expected. There are such problems as weak retail capacity, weak resources and inadequate coordination. So in the fourth quarter of last year, Lining eliminated 4 dealers, and at the same time, increased the proportion of direct outlets.

Industry "closing shop tide" has not stopped

Unlike Lining's increasing profits and falling profits, some sports brands seem to have entered a path of volume and profits.

Among them, Anta's revenue grew by 22.4% to 4 billion 122 million yuan, while its net profit increased by 28.3%. While PEAK's revenue increased by only 10.07%, its net profit increased by 35.96% to 121 million yuan.

In terms of gross profit margin, three enterprises in China Daily have been fully increased.

Among them, Anta's gross profit margin increased by 4 percentage points to 45.1%, while Lining's gross margin was 44.6%, an increase of 1 percentage points.

But Zhang Qing believes that the industry is also too optimistic about the warmer.

"At present, the industry is still in excess of capacity and supply."

In Zhang Qing's view, this surplus is not simply a supply exceeding demand, but the supply of the industry is still homogenization, and the demand of consumers tends to be diversified.

"Only changes in the supply mode of industry homogenization can really satisfy the needs of consumers. In the future, more enterprises will be eliminated in the whole industry."

In fact, three of the half year reports are being published.

Behind the rebound in revenue, store contraction is still in progress.

In the first half of this year, the number of Anta stores decreased by 56, while Lining reduced by 244, while PEAK reduced by 333.