US: Exceed Q2 profit slumps amid economic slowdown
- Q2 profit slumps 81.1%
- Revenue slips 24.2%
- CEO holds positive outlook
Chinese sportswear company Exceed saw its second-quarter net profit plummet 81.1% on the back of weakening demand in China, amid a challenging global retail environment.
Net profit for the three months to the end of June slumped to CNY30m (US$4.7m), compared to CNY158.7m last year.
Operating profit declined 67.7% to CNY35.5m, while gross margin was 28.8%, representing a 2.2 percentage point decrease compared to the same quarter last year.
Revenue fell 24.2% to CNY562m as the company decided to trim production and reduce deliveries to distributors. Sports apparel revenue slipped 24.9% to CNY277.2m, while footwear sales decreased 25.1% to CNY273.3m due to lower sales volume.
Shuipan Lin, Exceed's founder, chairman and CEO, said: "As anticipated, our results in the second quarter were impacted by weakening consumer demand in China, which was largely attributable to the domestic and global economic slowdown."
He added: "While we expect to continue to operate under unfavorable economic conditions for the remainder of this year, we believe we have the right strategy in place to effectively manage our production and inventory levels, maintain a lean operating structure and continue to strengthen brand awareness. Our priorities for the remainder of this year will focus on strengthening our brand equity through effective marketing and prudent expansion of our distribution network, and the continued execution of our long-term operational plan to align our production facilities and sales network to best capture growth opportunities in China's evolving sportswear market.."
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