The performance of the entire sports market is hardly optimistic.
On July 11, Anta released an announcement on its operating performance for the second quarter of 2022. Among them, in the second quarter alone, the retail sales of Anta’s main brand, FILA, and other brands (Descente, Colon, etc.) respectively recorded mid-single-digit declines, high-single-digit declines, and 20% to 25% growth year-on-year.
Anta is recovering
Anta explained that due to the rebound of the epidemic in the first half of this year, some offline regional stores suspended operations and were concentrated in high-tier cities and shopping malls. The offline retail business was adversely affected by the significant decline in passenger traffic and the weakening of consumer willingness to spend. . However, its strategic expansion of online channels to promote online sales has offset the impact of the suspension of operations of some physical stores.
Broken down, it is not without its highlights.
The company disclosed that benefiting from the upgrade of brand power and product power driven by Anta’s brand leadership plan last year, against the backdrop of the adverse impact of the epidemic, the main brand Q2 retail discount was approximately 25% off, improving year-on-year/quarter-on-quarter; the inventory-to-sales ratio slightly exceeded 5. Still maintains a benign range.
Looking at brands/channels, despite the greater impact of the epidemic in high-tier cities, Anta Kids still achieved positive growth in Q2; e-commerce channels achieved high single-digit positive growth under a high base of nearly 50% growth in 2Q21.
From the perspective of the FILA brand, local epidemics have concentrated on disrupting the Q2 performance of high-tier cities. In June, Shanghai’s unblocking drove double-digit growth. FILA brand channels account for a high proportion in high-tier cities where local epidemics have been severely affected. When the epidemic was severe, more than 20% of stores were closed, but Q2 performance was still better than that of international brands. Considering that the epidemic has directly caused store closures and reduced customer flow, FILA brand Q2 still maintains a healthy 16% off/75~20% off regular price/comprehensive discount, and the current inventory-to-sales ratio is higher than 7.
Nike’s global support
Another international giant is also showing signs of weakness.
At the end of June, Nike announced its financial report for the fourth quarter of fiscal year 2022 (2022/3/1-2022/5/31) as of May 31 this year. For the period, its revenue was US$12.234 billion, approximately 79.390 billion yuan. A year-on-year increase of 3% (the revenue growth rates here and below exclude exchange rate effects); net profit was US$1.439 billion, approximately 9.338 billion yuan, a year-on-year decrease of 5%.
Among them, Nike’s Greater China revenue was US$1.561 billion, equivalent to approximately 10.130 billion yuan, a year-on-year decrease of 20%, and EBIT (profit before interest and taxes) fell by 55%, the fastest decline among all regions; due to the widespread impact of the epidemic, more than 100 The city and about 60% of its businesses were affected.
Focusing on categories in Greater China, footwear revenue was US$1.178 billion, a year-on-year decrease of 12%; apparel revenue was US$350 million, a year-on-year decrease of 40%; equipment revenue was US$33 million, a year-on-year decrease of 28%.
In addition, Nike’s revenue in North America was US$5.115 billion, a year-on-year decrease of 5%; EMEA (Europe, the Middle East and Africa) revenue was US$3.251 billion, a year-on-year increase of 20%; APLA (Asia Pacific and Latin America) revenue was US$1.682 billion, a year-on-year increase of 24%.
It is worth noting that to a certain extent, it is the attribute of globalization that has stabilized Nike’s overall performance. Its major regional markets, except China and the United States, have shown a growth trend.
This has also become Anta’s direction. It stated in last year’s annual report that it will continue to firmly implement the development strategy of “single focus, multiple brands, and globalization” in the next ten years and deepen the “globalization” layout. However, no more specific measures were disclosed.
In terms of brand power, international brands still have certain advantages. According to data from Jiuqian Central Station, in this year’s June 18th promotion, Nike, Adidas, and Anta ranked among the top three, achieving sales of 1.034/7.18/690 million yuan respectively, which was -2%/+10%/+17% year-on-year.
On July 13, Anta closed at HK$94.65, a decrease of 0.26%. On July 12, Eastern Time, Nike closed at $103.76, a decrease of 1.28%.
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