Pathfinder: The Gross Margin And Gross Profit Margin Of Outdoor Goods Are Down.

Recently, Pathfinder issued semi annual report. In the first half of 2019, the Pathfinder achieved a business income of 691 million yuan, down 21.16% from the same period last year, and realized a net profit of 82 million yuan, an increase of 239.36% over the same period last year, temporarily reversing the declining trend of losses for two consecutive years. The company said that the decline in revenue was mainly due to the initiative to adjust the scale of the travel service business with a lower profit margin, resulting in a sharp reduction in travel service revenue. Profit growth was mainly due to the reduction of inventory, disposal of private property and loss of non outdoor business.

It seems that Pathfinder has improved profitability after stripping off non outdoor businesses. But it is noteworthy that the gross profit margin of the main business of the company, the outdoor products, dropped by 6.61 percentage points compared with the same period last year, and the gross profit decreased by 6.02% compared with the same period last year. This is obviously not an optimistic signal for the Pathfinder who focuses on the main business. In addition, after stripping off the main business, the company's space to reduce costs and expenses will be limited. There is still some pressure to maintain sustained profit growth in the competitive outdoor goods competition market.

　 Gross profit and gross profit margin for outdoor products

Statistics show that the Pathfinder landed on the gem in 2009, and there was only one main business at that time, that is, the industry was engaged in R & D design, outsourced production and sales of outdoor products. In the first few years before the listing, the company's revenue and net profit increased significantly. In 2015, the company started many mergers and acquisitions, involving tourism services and big sports. The diversification pattern made the company's revenue and net profit fluctuate significantly. In 2017 and 2018, the company lost two consecutive years of losses, and realized net profit of -0.85 billion yuan and -1.82 billion yuan respectively. Now it is facing the risk that the stock may be suspended.

In such a situation, the Pathfinder gradually stripped the loss of tourism services and sports and other businesses, from the first half of this year's performance, it has a certain effect.

But it is worth noting that the main business of the Pathfinder - the gross profit margin of outdoor products is decreasing. In the first half of the year, the outdoor income of Pathfinder reached 537 million yuan, an increase of 8.02% over the same period last year, but the gross profit margin dropped from 50.88% in the same period last year to 44.27%.

According to Pathfinder, the gross profit margin of the main outdoor business of the company decreased compared with the same period last year, mainly because the company has strengthened the degradation of the inventory products in the past quarter. The question is, how long can a pathfinder keep on inventory and price change? Can this way increase gross profit?

In the first half of the year, the explorer outdoor business realized gross profit of 238 million yuan, a decrease of 15 million yuan from 253 million yuan in the same period last year, a decrease of 6.02% compared with the same period last year. In other words, the increase in revenue by the way of inventories can not eliminate the impact of gross margin reduction.

　　 Will the Pathfinder of the industry return to the main business and continue to make profits?

Through the annual reports of Pathfinder in recent years, we can see that the income of main business outdoor products has been decreasing year by year since 2016. In the 2016-2018 year, the outdoor garments of the company achieved revenues of 1 billion 239 million yuan, 1 billion 61 million yuan and 1 billion 41 million yuan respectively, representing a decrease of 16.89%, 14.36% and 1.83% respectively, while the outdoor footwear products achieved 354 million yuan, 265 million yuan and 220 million yuan respectively, respectively.

In addition, the gross profit margin of the above three subdivision products also showed a downward trend on the whole. In the 2016-2018 years, the gross profit margins of outdoor clothing were 46.36%, 44.95% and 44.75% respectively; the gross profit margins of outdoor footwear were 45.87%, 41.89% and 38.63%, respectively, and the gross profit margins of outdoor equipment were 31.71%, 38.21% and 28.68% respectively.

That is to say, the decline in gross profit margin and gross profit of the explorer outdoor products in the first half of this year has continued to decline in recent years, in addition to what the company said is to reduce inventories. After stripping off the main business, can the Pathfinder set the declining trend of depilatory interest rate? It is also necessary to note that after stripping off the main business, the cost and cost of the company will be limited and the net profit will be limited.

The company's main business environment is not very optimistic. According to the 2018 China outdoor products Market Research Report released by GF and COCA, the total retail sales of domestic outdoor markets in 2018 were 24 billion 980 million yuan, an increase of 2.10% over the same period last year, and the total shipment volume was 14 billion 120 million yuan, an increase of 2.38% over the same period last year. The growth rate of the industry market continued to slow down, and the growth rate was the lowest in recent years.

The above analysis shows that the main product revenue of the Pathfinder has declined for three consecutive years, which is already lower than the overall development speed of the industry, and there is also some pressure on the future profit space of the industry. Whether the Pathfinder after returning to the main business can solve the problem of declining revenues and gross margins, whether it can compete with COLUMBIA, THE NORTH FACE and other brands, and whether it can reshape the past glory, all these remain to be tested by the market.