Recently, local apparel companies have successively released performance reports for the first half of the year. Affected by the epidemic, the performance of many companies has declined significantly.
On the evening of July 14, Meibang Apparel released a performance forecast stating that the company is expected to lose 620 million yuan to 680 million yuan in the first half of 2022, a decrease of 1492.73% to 1646.86% compared with the same period last year. Although several other apparel companies currently announcing performance reports have not suffered huge losses, their performance is not optimistic either.
The net profit of Semir Clothing, the leader in casual clothing, fell by more than 80% compared with the same period last year. The company expects the net profit attributable to shareholders of listed companies in the first half of 2022 to be 90 million to 130 million yuan. Another company, Peacebird, has maintained an upward trend in sales in the past two years. The company expects to achieve a net profit attributable to shareholders of the listed company of about 133 million yuan in the first half of 2022, which will be a decrease of about 68% compared with the same period last year.
Ellisi released its 2022 semi-annual performance forecast. It is expected to achieve a net profit attributable to shareholders of listed companies of about 47 million yuan in the first half of 2022, a year-on-year decrease of approximately 74.79% compared with the same period last year.
Anzheng Fashion expects to achieve a net profit attributable to shareholders of listed companies of 15 million yuan to 21 million yuan in the first half of 2022. Compared with the same period last year, it will decrease by 59.2572 million yuan to 65.2572 million yuan, a year-on-year decrease of 73.83% to 81.31%. The net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses is 10 million yuan to 14 million yuan. Compared with the same period last year, it will decrease by 56.0108 million yuan to 60.0108 million yuan, a year-on-year decrease of 80% to 85.72%.
The above-mentioned companies all mentioned the epidemic in the first half of this year when explaining the reasons for the decline in performance.
Meibang Apparel said that due to the epidemic, the company’s logistics headquarters in Pudong, Shanghai was unable to deliver goods normally to offline stores and online shopping nationwide for about 2 months, resulting in a decline in the company’s operating income and operating profits. In addition, in the first half of the year, the company continued to close directly-operated stores in unreasonable business districts, resulting in high cost of closing some stores, which affected the current operating income and net profit to a certain extent.
Peacebird also stated in the announcement that due to adverse factors such as the epidemic, the company’s retail performance in the first half of the year was poor, and retail sales declined year-on-year, resulting in a corresponding decline in operating income and gross sales profit year-on-year. In addition, the company’s fixed expenses such as rent for directly operated stores and employee salaries are relatively large, and the decline in retail performance has led to a large decline in the company’s non-net profit.
Elise said that affected by the epidemic, stores in the company’s key areas are unable to operate normally; the number of directly-operated stores has increased significantly compared with the same period last year, and rigid expenses under the epidemic are relatively large; factors such as the situation in Russia and Ukraine and the depreciation of the euro have significantly affected the profits of overseas business in the second quarter. ; Affected by the inability to ship goods during the epidemic, the joint-stock company Baiqiu Shangmei experienced a significant decline in the second quarter. However, the company has actively increased sales through new store development, online sales, community marketing and other methods. Revenue in the first half of the year has performed well and is expected to increase by 5%-10% year-on-year.
The rise in raw material costs also has a certain impact on various companies. For example, Semir Apparel stated that during the reporting period, the increase in raw material prices in the supply chain led to an increase in the company’s procurement costs. At the same time, sales promotion efforts increased, resulting in a decrease in gross profit margin.
The decline in performance was expected by many market participants. In the first half of the year, the domestic epidemic situation recurred. Offline retail stores in many places were closed, and the logistics of online sales was not smooth. Express delivery services in many places were hampered, and consumers were struggling to place orders. It is common for orders to be returned after waiting for many days but not being shipped.
Popular clothing brands target a wide range of customer groups and have low consumer stickiness. Their sales are relatively more dependent on mass consumer traffic, including offline store traffic and online multi-platform traffic. According to our tracking and judgment, the epidemic situation of relevant brands since March has It is generally affected under control. Ju Xinghai, an analyst at Guosheng Securities, said that from March to May, the epidemic fluctuated greatly across the country, and cross-regional logistics were often affected. Clothing terminal consumption was greatly affected, which directly affected the market’s performance expectations and sentiment for brand owners, which also made Terminal sales of the fashion and casual apparel segment have been greatly affected.
In the future, as the epidemic situation stabilizes and passenger flow recovers, it is expected to show month-on-month improvement. However, the impact in the second quarter is still expected to be evident at the full-year performance level. “The epidemic has affected consumer confidence. The subsequent recovery of passenger flow is expected to improve terminal performance, but the medium-term growth momentum has yet to be restored.”
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