Last Year, 4 Billion 400 Million Of Anta'S Inventory Fell By 20% Over The First Quarter.

Anta Sports Products Limited (hereinafter referred to as "Anta sports") recently disclosed its first quarter performance in 2020.

Anta's brand retail sales decreased by 20% to 25% over the previous year, while the FILA brand retail sales declined in the same period last year, while the retail sales of other brands declined by a high single digit number over the same period last year.

This reporter learned that, after the outbreak of the end of January, Anta sports products sales and production were affected, especially in 2-3 months, the company suspended some parts of the country's stores or shortened the operation time, consumers reduced the number of shopping trips, and the offline income fell year by year. During this period, Anta sports owned factories increased by two weeks compared with previous years, and gradually resumed work in February 17, 2020. However, due to the restrictions on population movement, the company's factory staff have not been able to return, and the production capacity has been affected.

In order to cope with the impact of the epidemic, Anta sports has vigorously developed Tmall, live broadcast, WeChat small program and other business channel to ease the impact of the epidemic on offline stores. At the same time, the company strengthens communication with distributors, monitors terminal inventory, controls operational risks, gives distributors back support, and repurchases the 10%-15% of the distributor's orders at factory price; in production, Anta sports are in epidemic situation. It will reduce the purchase order 10%-15% in the two quarter and the three quarter after the occurrence of the situation. In the future, the order will be adjusted dynamically according to the epidemic situation and the pressure on channel inventory will be reduced.

Lv Ming, an analyst with open source securities, said that, overall, under the influence of the epidemic, Anta sports has exceeded market expectations in terms of both retail sales and discount rate control. The main reasons behind it include:

1, FILA, Descente and other brands online grew faster. The online sales base of these two brands is relatively low. In the first quarter, Anta sports focused on building online sales platform through direct broadcast drainage, promotion and other ways, and FILA, Descente and other brands were directly battalion mode. The level of online and offline inventory interoperability was relatively high, which could adapt quickly to the sale mode change during the epidemic.

2, FILA brand positioning in the high-end, consumers are more recognized for their brand power, relatively strong compression during the epidemic.

3, Anta sports has taken timely and supportive measures for dealers: for example, helping dealers build small program stores, realizing inventory exchange between companies and distributors, guiding retail personnel to line drainage, and so on.

It is understood that, as of now, Anta sports dealer inventory situation is gradually improving, Anta sports to dealers mainly take several measures: first, the different quarter of the goods to take different efforts to subsidize the flow of water policy, two is for dealers have ordered two quarter goods take a single order measures; three is to relax the goods repurchase discount, buy back is still in advance. Anta's body and the repurchase ratio of goods in the first quarter are close to 10%. It is reported that Anta sports hopes that by the end of the first half of the year, the dealer's Treasury ratio will be controlled between 5.5-6.

Up to now, Anta and offline stores have basically resumed their business, and sales under the line have recovered to 70% as expected. Anta brand is expected to return to double digit growth in the second half of this year, and FILA brand will recover to over 30% growth.

Lv Ming judgment, taking into account that Anta sports in the first quarter of the business is higher than the market expectations, is expected to gradually weaken the impact of the epidemic, follow-up need to focus on tracking channel inventory digestion. Of course, cleaning up stocks is not done overnight. The digestion of seasonal goods also needs to meet the new progress of goods in the two or three and fourth quarter. Therefore, it is expected that the overall stock of Anta sports will return to normal level until the whole year, but the overall trend is good.

Everbright Securities researcher Li Jie believes that in the future, with the end of the epidemic, domestic sports demand is also expected to rebound, and the government recently introduced a number of policies to promote consumption recovery, sports as a consumer upgrade industry is expected to get more government policy support. Anta, as a local brand leader, has continuously strengthened its brand research and development, design and marketing investment in recent years, and its brand image is improving, which is expected to benefit from the rebound of residents' sports consumption in the future.

From a long period of view, Li Jie pointed out that the epidemic is a short-term event, not only difficult to change the long-term development logic of the clothing industry and Anta sports, but also will promote consumers to pay more attention to the healthy movement in the future, and then promote the continuous prosperity of the sports apparel category. At the same time, Anta, as the leading enterprise of sports apparel, is also expected to benefit in the long term competition, because the epidemic situation is global. Postponed the better performance of China's control of the epidemic to promote national identity and sense of pride, consumers in the future will be more likely to agree with the local high-quality consumer brands. In addition, the epidemic will impact on the whole industry of sports shoes and clothing in the short term. The risk of small and medium-sized brands is weak, and the channels, inventory and cash flow are under greater pressure. The epidemic will be more pronounced, and the epidemic is expected to accelerate the industry. Small business quit.

According to public information, Anta sports was founded in 1991 as the largest retail brand of sports shoes and clothing in China. Anta sports and main brands include Anta, FILA, DESCENTE, SPRANDI, KINGKOW and KOLONSPORT.

According to the financial report, in 2019, Anta sports realized business income of 33 billion 930 million yuan, an increase of 40.8% over the previous year, maintaining double-digit growth for 6 consecutive years, operating profit of 8 billion 690 million yuan, an increase of 52.5% over the same period last year, and the net profit of shareholders should be 5 billion 340 million yuan, up 30.3% over the same period last year.

In the reporting period, Anta brand achieved a revenue of 17 billion 450 million yuan, accounting for 51.4% of the total revenue of the company, and the FILA brand achieved a revenue of 14 billion 770 million yuan, accounting for 43.5% of the total revenue of the company. The total revenue of other brands was 1 billion 708 million yuan, accounting for 5.1% of the total revenue of the company.

By the end of 2019, Anta sports stock was 4 billion 405 million yuan, an increase of 52.30% over the beginning of the year, mainly due to the expansion of brand businesses. In 2019, the average number of days of inventory turnover was 87 days, an increase of 6 days compared with that of the previous year. The main reason was that FILA was mainly operated directly and the inventory turnover rate was relatively slow.

By the end of 2019, Anta sports accounts receivable was 3 billion 896 million yuan, an increase of 55.55% over the beginning of the year, mainly due to the expansion of the company's business scale. The average receivable turnover days in 2019 were 34 days, down 1 days compared with the same period last year.