Food
While revenue rose 47.6 per cent for the quarter ended June 30 for China Sports International, its footwear subsidiary Yeli China is facing difficulties.
The Singapore-listed company has changed its financial year end from December 31 to June 30, meaning its current period covers 18 months.
For the latest quarter, revenue amounted to about RMB22.71 million (US$3.4 million). For the 18 months ended the same date, revenue grew by 4.8 per cent to about RMB358.8 million. The slender increase was mainly attributable to persistent and increasing competition in the sportswear industry.
“Our distributors continued to be wary of the intensified competition and became even more prudent in placing their orders for footwear and apparel products,” says the company.
However, an increase in OEM orders in first half enhanced revenue performance.
Footwear sales for the 18 months grew only 2.6 per cent to about RMB345.4 million. The company says the poor economic outlook and lack of product improvement resulted in fewer orders from Yeli footwear distributors.
Because of the persistent weakening retail sportswear market and intensified price competition, more than half the distributor sales outlets have been closed.
During the 18 months, Yeli footwear sales were about RMB114.5 million, representing 33.1 per cent of the company’s footwear range, down from 53 per cent.
For the sixth quarter, Yeli footwear revenue fell 25 per cent to about RMB15.8 million.
Apparel sales were RMB13.4 million for the 18 months, up from RMB5.83 million, and for the sixth quarter were RMB1.9 million, down from RMB2.9 million.
Overall gross profit was up 21.5 per cent to about RMB13.9 million for the 18 months, mainly because of the high sales volume from the OEM footwear segment.
Overall gross profit margin edged up 3 per cent for the 18 months.
