361 Degrees reported sales were up slightly in 2018 but profits were down due to margin pressures.
During the year under review, the group’s revenue rose 0.6 percent year-on-year to RMB5,187.4 million from RMB5,158.2 million in 2017.
361 Degrees said the relatively flat revenue was mainly due to the fewer replenishment orders resulted from conservative consumer sentiment amid the uncertainty arising from the Sino-US trade negotiations in the second half of the year, and the revised delivery schedule resulted from the Group’s Logistics Optimization Program implemented in 2018.
Revenue contribution from the footwear segment accounted for 42.7 percent; apparel sales accounted for 38.5 percent of the Group’s revenue. Revenue of 361° Kids continued its strong momentum and grew by 14.7 percent to RMB816.0 million (2017: RMB711.1 million), representing 15.7 percent of the Group’s revenue. aThe web-exclusive product sales of E-commerce business increased by 85.3 percent to RMB739.2 million (2017: RMB399.0 million), contributing to 14.3 percent of the Group’s revenue during the year under review.
The gross profit in 2018 amounted to RMB2,105.9 million (2017: RMB2,156.4 million) while gross margin adjusted to 40.6 percent, down 120 basis points.
Profit attributable to the equity shareholders was RMB303.7 million (2017: RMB456.7 million), equivalent to basic earnings per share of RMB14.7 cents (2017: RMB22.1 cents).
In its statement, Mr. Ding Wuhao, President of 361˚ Group concludes, “To become a century-old brand and a respectable world-class sportswear company is the long-term vision of the Group. The Group’s successful collaboration with the 2018 Asian Games once again earned worldwide recognition by the industry and achieved fruitful results in raising brand awareness and market expansion. In 2019, while maintaining sustainable growth in business, we will launch the rebranding initiative. We focus on mapping out the development directions in the long run, rather than just exploring the short-term revenue streams. While moving towards internationalization and rejuvenation, the Group hopes to create a new brand image, and build up a loyal clientele. Riding on the rapid growth of the kids wear segment, we expect the consumers of the kids wear products will become the major customers of the core brand in five to ten years. From 2019 onwards, the effects of the rebranding initiative will be gradually reflected in all aspects, paving the way for better business performance and brighter prospects.”