A number of listed companies in the clothing category have recently disclosed their 2022 performance reports. Overall, the combination of multiple factors such as weak market demand and increased operating costs has had a considerable impact on physical store operations, leading to a significant decline in the performance of many companies.
However, in the face of pressure from all aspects, listed apparel companies have worked hard to reverse the adverse effects by exploring market channels, increasing product technology research and development, and accelerating digital transformation. At the same time, with the accelerated implementation of a series of national measures to “expand domestic demand and stabilize the economy,” especially the “good start” in consumption during the Spring Festival in 2023, the apparel consumer market has accelerated its recovery.
Sports brands perform relatively stably
Data from the National Bureau of Statistics show that in 2022, my country’s total retail sales of consumer goods will be 43,973.3 billion yuan, a year-on-year decrease of 0.2%. During the same period, my country’s total retail sales of clothing, shoes, hats, and knitted textiles reached 1.3003 billion yuan, a year-on-year decrease of 6.5%.
Despite facing various market pressures, the performance of sports footwear and apparel brands such as Anta and Xtep in 2022 has shown relatively strong resilience and is still in the leading camp.
ANTA Sports predicts that the retail sales of ANTA brand products will increase slightly in 2022 compared with 2021. The retail sales of its FILA brand products will decline slightly year-on-year, and the retail sales of other brand products will increase by 20%-25% year-on-year.
Among them, in the fourth quarter of 2022, the retail sales of Anta brand products fell by 7%-8% year-on-year, the retail sales of Fila brand products fell by 10%-20% year-on-year, and the retail sales of other brand products increased by 10%-20% year-on-year.
Anta said that in 2022, a significant decline in passenger traffic and weakening consumer demand will drag down the growth momentum of the company’s product sales. Although the company’s online sales have offset the performance decline of some physical stores, and it has strictly controlled costs and cut operating expenses, it is still not enough to completely offset the impact and impact of market pressure.
However, in the face of a challenging operating environment, Anta’s operating cash flow will remain stable in 2022. It is expected that with the gradual implementation of policies to expand domestic demand, Anta is expected to seize the growth opportunities after the market recovery and continue to maintain high-quality growth.
Compared with Anta, Xtep’s market performance is relatively optimistic, and its retail sales in 2022 are expected to achieve mid-double-digit growth. Yang Lubin, chief financial officer of Xtep International, said that the sales of the group’s brands will increase by more than 20% year-on-year, of which Xtep children’s sales will increase by 40%-50% year-on-year.
In addition, 361 Degrees’ performance forecast also shows that as of the end of December 2022, the fourth quarter product retail sales of 361 Degrees’ main brand 361 Degrees were roughly the same as the same period last year. The retail sales of children’s clothing brands achieved a slight increase year-on-year, and e-commerce sales increased year-on-year. An increase of 25%.
According to Li Jie, a researcher at Soochow Securities, the extent to which clothing companies and brands are directly impacted by the market is mainly determined by their channel characteristics, such as the proportion of offline revenue, number of stores, store distribution, etc., while the degree of indirect impact is mainly determined by Determined by its product category and positioning. Judging from the performance of the past three years, product categories are of greatest significance to clothing brands in resisting external impacts. From the perspective of the degree of impact, the order from small to large is sportswear, men’s clothing, high-end women’s clothing, and casual clothing.
Wang Feng, an analyst at Shanxi Securities, also said that against the background that young consumer groups are more interested in domestic sports brands and domestic sports brands are increasing their own product research and development efforts, the market share of related sportswear companies will continue to increase. Therefore, sportswear is still the category with the best growth potential.
From this point of view, it is no accident that Sports Phalanx can achieve relatively stable market performance.
The market is weak and it is difficult to achieve yesterday’s glory
Compared with the market performance of sports brands, some traditional clothing brands that once dominated the consumer market will not have an easy life in 2022. Even the fast fashion brand Peacebird, which has achieved “growth against the trend” in the past two years, will also experience weak growth in 2022.
According to performance forecast data, in 2022, Peacebird is expected to achieve a net profit of about 195 million yuan, a year-on-year decrease of about 71%; while its non-net profit loss is about 14 million yuan, a year-on-year decrease of about 103%.
This is Peacebird’s first loss in six years since its listing.
In 2020, Peacebird’s sales reached 9.39 billion yuan, a year-on-year increase of 18.4%, and non-net profit increased by 59.1%. In the first half of 2021, Peacebird continued to maintain a high growth trend and delivered another enviable semi-annual report. Its operating income reached 5.015 billion yuan, a year-on-year increase of 55.88%; the net profit attributable to the parent company and non-net profit increased by 240.5% and 420%, showing an explosive trend.
However, starting from the third quarter of 2021, Peacebird began to show decline, with revenue growing only 3.92% during the quarter. Throughout 2021, Peacebird experienced a phenomenon of increasing revenue without increasing profits. Total revenue was 10.92 billion yuan, a year-on-year increase of 16.3%. However, net profit attributable to the parent company and non-net profit after deduction fell by 5% and 7.3% respectively.
As for the reason for the loss, Peacebird said that due to various adverse factors in the past year, the company’s retail performance declined, and the company’s gross sales profit declined year-on-year. At the same time, the company’s fixed expenses such as store rent and employee salaries are�� is relatively high, resulting in a loss in the company’s non-net profit deduction.
“In 2022, some footwear and clothing companies will have a difficult time, and it will be difficult for them to make major breakthroughs in the performance of online and offline channels.” Cheng Weixiong, an independent analyst in the footwear and clothing industry, believes that the downturn in the consumer market has affected the overall performance of clothing companies to a certain extent. annual performance.
Coincidentally, the performance of Semir Apparel is also not optimistic. According to performance forecast data, Semir Apparel is expected to achieve a net profit of 600 million to 700 million yuan in 2022, a year-on-year decrease of 59.64% to 52.91%.
In fact, in the first half of 2022, the downward trend in the performance of companies such as Peacebird and Semir Apparel has already emerged. Among them, Peacebird’s net profit fell by 67.57%, and Semir Apparel’s net profit fell by 84.31%.
Hao Shuai, an analyst at Bank of China Securities, said that 2022 will be a challenging year for apparel companies, especially in the second and fourth quarters, when terminal passenger flow dropped significantly and the overall performance of the sector was under pressure. In addition, the discounts of some clothing brands will continue to increase in 2022, which will also lead to a significant decline in revenue and profits.
This year, faced with considerable market pressure, companies are also trying to find opportunities to “break the situation” through various means.
In 2022, the concept of “antibacterial fabrics” became popular, and companies such as Anel relied on the concept of “antibacterial fabrics”, and their stock prices hit the daily limit one after another.
Semir Apparel also stated on the investor interaction platform that antibacterial fabrics and other functional fabrics have been widely used in Semir and Balabala brand products. Meibang Clothing also disclosed on the investor interaction platform that some of the company’s products currently on sale use antibacterial fabrics. Peacebird also uses new antibacterial fabrics in some products.
However, speculating on concepts is not a “panacea” for winning the market.
A few days ago, Anair released its 2022 annual performance forecast. Data shows that although live broadcast e-commerce sales increased by 26.5% year-on-year, overall, the company’s net profit attributable to shareholders of listed companies during the reporting period still suffered a loss of 230 million yuan to 270 million yuan. , the net profit loss after deducting non-recurring gains and losses was 245 million yuan to 285 million yuan.
The extent to which the “antibacterial” concept, which is favored by capital, can resolve the current difficulties faced by enterprises seems to be still full of uncertainty.
Core advantages to secure market opportunities
For clothing companies in 2022, it can be said that some are happy and some are sad. While some companies are frowning because of declining performance, there are also companies that are breathing a sigh of relief as they try their best to stabilize their performance.
Among them, I have to mention Giordano, the veteran of the leisure industry who has been making a lot of noise in the capital market in recent times.
Continuing the performance growth trend in 2021, Giordano’s net profit in 2022 once again achieved double-digit growth. Its performance forecast shows that thanks to the sales growth in Southeast Asia and the Gulf Arab countries, as well as the company’s streamlining of existing businesses and effective cost control, Giordano will achieve a net profit of HK$240 million-HK$270 million in 2022, a year-on-year increase of 26%-42% .
In fact, Giordano has been underperforming since 2018. In 2018, its net profit fell by 4%; in 2019, its net profit fell by 52.08%; in 2020, its net profit turned from profit to loss; although its performance increased in 2021, the revenue scale is still not as good as the level in 2019.
Faced with market difficulties, Giordano has also tried to transform many times, such as launching the young trendy brand BSX, Giordano Youth and Giordano Women’s sub-brands, in the hope of attracting the attention of more young consumers, but with little success, market performance mediocre.
Since then, Giordano has set its sights on overseas markets. In 2021, Giordano opened new stores in Egypt, Kenya, Mauritius and Indonesia. The international market has become a remarkable new profit growth point in recent times.
The one with the most eye-catching performance in 2022 is undoubtedly Lutai.
As global market demand gradually recovers, driving product sales growth, Lu Thai’s performance will increase significantly in 2022. Its performance forecast shows that the company’s net profit in 2022 will reach 850 million yuan-1.05 billion yuan, a year-on-year increase of 144.53%-202.06%; deducting non-net profits will reach 750 million-900 million yuan, a year-on-year increase of 293.72%-372.46%.
It is certainly not easy to double net profit in the current market situation.
Lu Tai said that although the complex market environment has had a certain impact on the company’s operations and consumer demand has been suppressed to a certain extent, its products are positioned among mid-to-high-end consumer groups and the resilience of product demand is relatively good. In January 2023, the company’s fabric production capacity utilization rate reached more than 70%, and its clothing production capacity utilization rate was close to 100%.
In 2022, Nanshan Zhishang’s revenue and net profit will also achieve double growth.
Its performance forecast shows that in 2022, Nanshan Zhishang will use its technological advantages and R&D advantages to continue to develop high value-added imported substitute fabrics and functional fabrics, promote the rapid growth of foreign trade orders, and lay out the new material field while focusing on the textile and apparel business. Create competitive advantages in product diversification and achieve performance growth. The company’s net profit is expected to reach 155 million yuan to 190 million yuan in 2022, a year-on-year increase of 1.7%-24.66%; non-net profit after deducting non-net profits is 142 million yuan-177 million yuan, a year-on-year increase of 1.13%-26.05%.
It is worth mentioning that the “Yantai Key Laboratory of Functional Fibers and Textiles” platform jointly applied by Nanshan Zhishang, Shandong Nanshan University and Nanshan Institute of Science and Technology has recently been approved by the Yantai Science and Technology Bureau and will be built into a regional key textile Engineering laboratory.
The international and domestic markets are working together to accurately locate consumer groups, focus on new technologies to create new advantages, and enhance the added value of products and brands. This is a trick for a number of apparel companies with promising performance to achieve breakthroughs in difficult times.
In this regard, Li Jie believes that in addition to actively responding to changes on the demand side, leading companies with strong risk resistance have advantages in supply chain, capital, technology, etc., which will help them maintain market share in adverse circumstances and are expected to recover during the market recovery. Get the upper hand.
�Regional key textile engineering laboratory.
The international and domestic markets are working together to accurately locate consumer groups, focus on new technologies to create new advantages, and enhance the added value of products and brands. This is a trick for a number of apparel companies with promising performance to achieve breakthroughs in difficult times.
In this regard, Li Jie believes that in addition to actively responding to changes on the demand side, leading companies with strong risk resistance have advantages in supply chain, capital, technology, etc., which will help them maintain market share in adverse circumstances and are expected to recover during the market recovery. Get the upper hand.
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