31St Annual Earnings Report: Net Profit Continued To Fall

< p > sports brand 31st degree released 2013 annual earnings report. According to the results of the report, the sales volume of the company decreased by 27.6% to 3 billion 580 million yuan year-on-year, and net profit fell to 211 million yuan, down 70% from the same period last year. Financial reports said the group's annual turnover decreased by 27.6% to 3 billion 584 million yuan. Gross margin also decreased by 0.3 percentage points to 39.5%, mainly due to the twice reduction of wholesale prices to distributors during the year, but most of the impact was offset by improvements in production efficiency. < /p >
< p > sales volume and average selling price of footwear and clothing all recorded double-digit declines. This is because the company is working with distributors to implement measures to cope with the downturn in the industry to ensure that channel inventory is maintained at a healthy level. < /p >
The progress of children's clothing < p > 361 degrees is encouraging. Turnover has increased by 13.6% over the past year, increasing for fourth consecutive years. More importantly, the brand is highly sought after in the market, giving its sales volume and average selling price a strong trend. 361 degree children's clothing also contributed more than 10% to the group's total turnover. Management is confident that this performance will continue to develop. < /p >
< p > it is quite necessary for the group to make the accounts receivable account for more than 180 days for 50% of the allowance, involving an amount of RMB 152 million yuan. In addition, the group continued to provide a total of 2053 stores in the year with a total allowance of RMB 170 million yuan. < /p >
< p > according to the reduction of turnover, the group selectively controls advertising expenses, rebuilds staff costs and implements general strict cost control. After deducting the impact of the provision for impairment, the above measures reduced the operating cost by about 16%. Although it is desirable, it is still not enough to reverse the pre tax profit. The pre tax profit is 62.1% to 315 million yuan less than in 2012. < /p >
< p > to ensure that retailers can operate on a platform that is profitable and continuous, the group further reduced the wholesale price of distributors in 2014 and shifted the discount to retailers. The group also continued to provide direct refurbishment allowance to eligible retail outlets to improve the appearance and image of the store. The group also streamlined the product categories at the order meeting and provided continuous training and education for retailers and their employees. < /p >
< p > in addition, the group encourages retailers to adjust to stores with a larger area (more than 100 square meters), and sell the entire product line of its main brands in the store and its two sub brands 361 degree children's clothing and "Shang" brand products. The reformed retail store strategy not only reduces the rental and staff costs of retailers, but also enhances competitiveness. It can also show a more comprehensive product to a wider audience. < /p >
< p > in the short term, some measures will aggravate the burden of the group. However, the Group believes that in the long run, it will focus on improving the retail level and making it more advantageous to its brands and ensuring that all holders of the business have a more solid foundation. < /p >
The other two initiatives of the group in the year are also worth noting. < p > The first is to set up a joint venture with One Way, the leading brand in Finland, to formally enter the sports market in northern Europe. In the first few years of the project, only a relatively small profit contribution was made, but the group could get the high-end research of the outdoor clothing market which was growing rapidly, thereby benefiting greatly. < /p >
< p > Second, the group set up an overseas business department with experienced and experienced experts. The team is responsible for bringing the brand to the international stage and developing business in Brazil and Latin America for the first time. The group is deeply aware that if we want to make this bold and inspiring plan succeed, we need to invest a lot in the next five years, but we believe that this business will bring new profit sources to the group. < /p >