361 Degrees International Limited, the sporting goods firm based in Hong Kong, reported revenues in the first half of 2020 fell by 17.0 percent to ¥2,686.1 million.
Due to the impact of COVID-19 in the first half of the year, the Group’s two core products, namely footwear and apparel, showed a downward trend and fell by 20.3 percent to ¥1,127.2 million and 18.8 percent to ¥1,100.7 million, respectively, year-on-year. The sales contribution from footwear products accounted for 42.0 percent of the Group’s total revenue while apparel sales accounted for 41.0 percent of the Group’s total revenue.
In addition, the revenue of 361° Kids remained an upward trend, with an increase of 3.4 percent to ¥401.8 million, accounting for 14.9 percent of the Group’s revenue. During the review period, the revenue for the sales of web-exclusive products were ¥315.8 million, accounting for approximately 11.8 percent of the total revenue.
The gross profit in the first half of 2020 was ¥1,015.8 million against ¥1,322.7 million a year ago, representing a year-on-year decrease of 23.2 percent. Gross margin decreased by 3.1 percentage points to 37.8 percent.
Operating profit reached ¥538.2 million, down 16.1 percent. Profit attributable to equity holders fell 17.8 percent to ¥302.0 million, equivalent to earnings per share of ¥14.6 cents.
As at 30 June 2020, cash and cash equivalents (including bank deposits and cash in hands, and fixed deposits with original maturities not exceeding three months) amounted to ¥3,206.0 million (31 December 2019: ¥3,422.3 million). Trade and bills receivable turnover days increased by 11 days to 160 days. Inventory turnover days decreased by 8 days to 112 days.
Due to the significant impact of the current epidemic on the company’s business activities, and considering the uncertainty of the epidemic and the global economic situation in the near future, the Board of Directors made a decision and recommended that no interim dividend be declared for the six months ended 30 June 2020.
Ding Wuhao, president of 361˚ Group said, “With China entering the normalization phase of epidemic prevention and control, the temporarily suppressed consumer demand will be gradually released. As a sunrise industry and a green industry, the sports industry is set to become a powerful engine for the country’s economic recovery after the epidemic. Looking ahead, as China’s leading sportswear brand company, 361° will continue to uphold the belief of ‘One Extra Degree of Passion’, focus on resources, and continuously improve core brand competitiveness. While consolidating its market position, it will continue to expand its market share, drive the steady development of the overall business, and strive to bring ideal returns to the shareholders.”
