HONG KONG: Anta Sports H1 profit down despite higher demand
- Profit fell 18.7% to CNY625.7m (US$102.2m)
- Turnover declined 14.4% to CNY3.37bn versus CNY3.93bn
- Gross margin slipped to 41.1% from 41.8%
Hong Kong-based sportswear firm Anta Sports Products has reported an 18.7% decline in first-half profit, despite seeing increased demand for its products.
The company said it "strategically optimised the execution capabilities" of its supply chain to help replenish stock of its best-selling items during the period.
Anta Sports chairman and CEO Ding Shizhong said: "China's sportswear industry still faces uncertainty associated with the unresolved excess inventory problem in the near-term."
However, its mid-to long-term outlook will be promising, he explained, as the Chinese government is expected to put more efforts into expanding domestic demand, boosting urbanisation and increasing participation in sports.
"Meanwhile, we have seen sequential improvements in our operational performance and the confidence of our retailers. We believe our strong execution and proper management of our distribution network enable us to bottom out at a faster pace than our peers," Shizhong noted.
"We will leverage our core strengths to maintain our leading position and to the meet the growing demand for sportswear in the long run."
Looking forward, Anta Sports said it will continue to consolidate stores in less optimal locations or with expiring leases to maintain a sustainable distribution network and stay competitive.
The group added that it will enhance efficiency in processing replenishment orders and will further shorten the lead time involved.
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