Breaking The Children'S Clothing Market, 361 Degrees Can Usher In A New Situation?

Since the launch of the brand,

It has been operated by independent business departments.

Express,

A mature customer base has been established with great potential for growth.

361 degree main brand and children's wear brand development process

Sports apparel industry has experienced the rapid development period before 2010, the adjustment period of 2011~2013 and the recovery period of 2014 years.

The overall performance of the company is in line with the change of the industry boom. The compound growth rate of the company in 2006~2010, 2011~2013 and 2014~2017 is 113.49%, -20.06% and 9.99% respectively, while the net profit compound growth rate is 222.88%, 56.82% and 4.72% respectively.

1. main brands encounter Waterloo

There was a period of 361 days.

Since 2011, the performance of 361 degrees has begun to go downhill, operating income plummeted from 5 billion 569 million yuan in 2011 to 4 billion 950 million yuan in 2012.

In 2012, Anta, PEAK, XTEP and Lining, the 4 leading sports and sports brands in China, were not able to survive the "Waterloo".

In 2013, the net profit of 331% decreased by 70% compared to the same period last year. 331% indicated that due to the large reduction in the quantity of orders, the impairment loss and overrun accounts receivable increased in the second half of 2013.

In 2013, in order to reverse the situation, 31st degree was adopted to close stores with poor performance or loss and reduce product categories.

It is understood that only a year,

The products were reduced from 1400 to 1000, and the adult clothing retail store was reduced from 8082 in 2012 to 7299.

2. turning the corner, turning children's clothing into a new growth point.

In 2014, the performance of the company reached a level of safety. Public information showed that the total operating income was 3 billion 906 million yuan a year, an increase of 9% over the same period last year. Net profit reached 398 million yuan, up 88.2% over the same period last year.

It is worth noting that in 2014, the state showed strong support for the development of China's sports industry, and launched a series of positive guidance policies and measures to encourage the general public to participate in sports.

Therefore, the reason why the attack in 2014 was largely depended on the national policy support for the recovery of the sports shoes and clothing market.

Demand increased, and children's clothing business began to perform well, and successfully launched "intelligent" shoes.

It continued to benefit from the national policies. The annual income of 2015 yuan was 4 billion 459 million yuan, an increase of 14.1% over the same period last year, with net profit of 518 million yuan and an increase of 30.2% over the same period last year.

During the industry adjustment period, the company launched the children's footwear business in 2011, and its rapid growth and income share rose rapidly from 1.29% in 2011 to 11.65%.

2017 the business income of adult shoes and clothing and children's shoes and clothing is 43.72 yuan and 711 million yuan respectively.

3. children's clothing business is increasing.

With the rise of the national fitness program, the sports brand which relied on the traditional offline sales channels as the main channel began to show signs of performance recovery in 2015. In 2016, the sales revenue of the brand with a "more than one love" brand was 5 billion 23 million yuan, although it was 374 million yuan lower than that of XTEP's 5 billion 397 million yuan, its annual revenue increased 12.6% compared with 2015.

In the third quarter of 2017, at the order meeting, children's clothing products were highly recognized for 11 consecutive quarters, while the 3643 main brands of 331 brands increased 7% in the same store sales. Does this mean that in the next ten years of gold sales in the sporting goods industry, the self run children's clothing business will become its main source of revenue?

In fact, driven by the sports craze, the two child policy and the "children's economy", children's wear has become a new growth point of 361 degrees in recent years.

Performance of 361 degrees

According to the 2017 annual financial report issued by 361 degrees, the performance of the brand in the past year was analyzed from market value, revenue, net profit, gross profit, gross interest rate, number of stores, e-commerce, stock and average price.

1, business efficiency

In 2017, the 361 degree children's business became one of the driving forces of the company's growth in recent years, and the 361 degree turnover increased by 2.7% to RMB 5 billion 158 million yuan. Its explanation was mainly driven by the year-round order growth in 2017. The total income of 2012~2017 and the children's clothing compound growth rate were 0.97% and 13.95% respectively. The proportion of children's clothing income increased from 7.5% to 13.8% during the same period, the gross profit margin was 49% yuan, the gross margin of children's clothing was about 41%, the gross profit rate of children's clothing increased continuously in recent years, and the business development was benign.

2, channel stores

As of December 31, 2017, a total of 5808 core brand stores were opened at 361 degrees.

Of which,

The total number of outlets is 1797.

In the international market, the 31st Degree International has 1241, 1030, and 378 brand outlets in Brazil, the United States and Europe.

The growth rate of children's clothing stores at 361 degrees has gradually increased since 2012, and has entered the adjustment stage in 2016, and the growth rate has dropped.

3, e-commerce business

E-commerce business is growing exponentially due to the rapid development of the e-commerce industry.

During the review period, the online dedicated e-business account for 7.7% of the group's revenue.

4. Inventory.

Not only does the inventory fluctuate greatly, but also the turnover time is obvious.

The increase was 50% from last year, from 541 million yuan to 814 million yuan, and the average turnover time increased by 13 days.

5, average selling price.

361 degree children's clothing brand is positioned as a sports brand located in the middle and low end market.

Not high.

From 2012 to now, the average selling price of children's clothing has been increased first and then decreased.

So far, the average selling price is around 60 yuan, and the growth rate is below -5%.

6, 361 degree earnings forecast and valuation

The income at 361 2018~2020 was 54.78, 58.14 and 6 billion 175 million yuan respectively. The growth rate was 5.08%, 6.12%, 6.22%, and net profit respectively 5.03, 5.49 and 595 million yuan respectively. The growth rate was 10.08%, 9.24%, and 9.24% respectively. The growth rate of EPS was respectively 10.08%, 9.24%, and RMB respectively.

We are optimistic about the future development of the company as the leader of high quality local sports apparel. The current stock price corresponds to 18 years PE 8 times, PEG is 0.84, at a low level, the first coverage is given to the "overweight" rating.

In many industries, big coffee acquiescence in one rule, as long as

There are no six or seven mature brands, and there are still opportunities for new brands.

At present, the major international brands still occupy the leading position in the domestic second tier cities, but the two or three line market is still an opportunity for domestic sports brands to deepen, and cost performance is also one of the reasons that domestic brands attract the most young parents.

Although the potential is huge, comparing the different performances of different brands in the industry also shows that this cake is not so easy to eat.

Nowadays, under the promotion of national policy and the sustained and steady growth of sports macro demand, the domestic sports market has maintained vigorous development momentum.

Compared with other competing products such as Anta and Lining, the performance of 360 degrees is relatively mild.

Under the background of the joint effort of children's wear market, fierce market competition and multi-level consumption ability and consumption concept will produce different differentiated markets. Only by continuously providing products with market competitiveness can enterprises meet the needs of different consumers.