How Does Andemar'S Performance Decline Sharply?

Lately,

The 2017 performance report was released.

This is a disappointing performance: total revenue of $4 billion 977 million, an increase of only 3.13% over the previous year, a loss of $48 million 260 thousand, and net profit fell by 75.6% over the same period last year.

The same downturn also has stock prices.

In the past year, Andemar's share price has fallen from about $27 at its peak to about $10.

However, since the beginning of this year, the price of Andrew has risen slightly, and its market value is about $6 billion.

According to the world clothing and shoe net, from 2013 to 2017, Andrew's annual revenue doubled.

But in 2017, Andrea not only experienced a sharp decline in performance, but also experienced dramatic changes in high-level personnel.

Kevin Plank, founder, chairman and CEO of the company, said in an interview with CNBC last month that 2017 is a year of Andemar's pformation and will be refocused.

And push it to a new height.

From the perspective of financial data, Andemar's problems mainly focus on three aspects.

The first is the contraction of the North American market.

Annual revenue of $3 billion 802 million has fallen by 5.07% year-on-year, accounting for 76.5% of the global market, a decrease of nearly 7 percentage points over 2016.

The decline of wholesale business is the main reason.

Andrew 61%'s revenue depends on wholesale business.

But in North America, Andrew did not sign long-term contracts with large channel operators.

On the one hand, the current

Facing fierce competition, the channel's performance is not as good as before.

On the other hand, if the channel terminates the contract with Andrew Ma, the latter will face the risk of a sharp reduction in sales and no substitute.

In addition, the decline in gross margin is also a key factor.

In 2017, Andemar's sales cost increased to 55% of revenue, and the proportion in 2016 and 2015 was 53.6% and 51.9% respectively.

Andemar said that in the supply chain problems such as raw material acquisition and production capacity, and improper inventory management, Andemar's gross profit margin is currently around 45%, but the company expects to grow by nearly 50 basis points to 45.5% in 2018.

The dramatic changes in the retail market also make it harder for Andrea to catch consumers' preferences in time.

"Due to changes in consumer demand for sports products of different types and brands, we may not be able to accept our new products. Our future success depends partly on our grasp of these changes," Andemar said in his performance report.

Andemar mentioned that consumer preferences involve evolving shopping experiences.

If Andemar's agent can not provide attractive offline consumption experience, or Andemar can not provide a good e-commerce shopping experience, then the brand image and performance will be affected.

Andemar also said that the company's long-term strategy may not be effectively implemented.

Its global expansion, footwear products and direct marketing strategy depend on brand global communication, electricity supplier, product supply, market share and cost control of sports shoes.

But in these areas, ADMA has been adversely affected by the decline in the North American market, especially in the downturn of wholesale business.

Nevertheless, Andemar saw hope in two areas.

In 2017, Connected Fitness (Andemar's online health platform) business income increased 10.5% to 89 million 180 thousand US dollars, accounting for 1.8% of total revenue, and the growth of users is the main driving force.

In February 2015, Andrew bought the fitness social networking platform Endomondo and fitness App MyFitnessPal, thus creating its own Connected Fitness.

This is the future of the development of Andrew in the future.

Planck said that since the beginning of 2018, users have recorded more than 99 million training sessions, running 137 miles and losing more than 130 thousand pounds.

On the other hand, the Asia Pacific region's performance increased by 62.5% over the same period last year, reaching US $443 million, accounting for 8.7% of the global market, representing an increase of 3.1 percentage points compared with the same period last year. The direct business is the main driving force.

The international market is also a new growth point for Andrew's long-term investment.

In terms of income structure, clothing products earned $3 billion 287 million, up 1.8%, accounting for 66% of total revenue. Men's and women's training and golf products were the main driving force.

Footwear products revenue of $1 billion 38 million, up 2.7%, accounting for 20.86%, and running shoes business grew fastest.

"We changed the income structure, from clothing to shoes, from accessories to different categories, such as running, training and basketball," Planck told CNBC. "We made three major events in 2017. We completed the upgrade and installed SAP, so we no longer need to worry about it.

We have a company of sufficient size, which provides flexibility for our sustainable development. "

At the conference call after the earnings announcement, Planck said that one of Andemar's goals is to become a "low-key company with a loud brand."

In order to achieve this goal, andmar has hired Patrik Patrick, a former president of the Aldo and VF group (American fashion giant, whose brands include The North Face, Timberland, Vans).

Planck said that many years of experience of Andemar will be used in the market and franchising.

But in view of the lesson of 2017, Planck did not dare to be too optimistic about the performance of Andrew's investors. "We are at a critical juncture in becoming a great sports brand."

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