Anta Sports Products, Ltd. (Group), which runs retail stores in China for the Anta brand, Fila, Descente, Kolon Sport, and majority owner of Amer Sports, reported that revenue reached another high in 2023, with a year-over-year (YoY) increase of 16.2 percent to RMB 62.36 billion. The Group said it “firmly secured [the] top position in the Chinese market.”

For the full year, direct-to-consumer DTC stores represented 56.1 percent of total sales, or RMB 17.00 billion, in 2023, compared to 49.4 percent of total sales, or RMB 13.69 billion, in 2022, a 24.2 percent increase YoY.

E-commerce represented 32.8 percent of total sales, or RMB 1.93 billion, in 2023, compared to 34.9 percent of total sales, or RMB 9.68 billion, in 2022, a 2.6 percent YoY increase. The revenue growth was said to be attributable to recovery of the retail market, continuous enhancement in channel mix of the traditional e-commerce platforms, including T-mall, JD.com, Pinduoduo and VIP.com, and expansion of new social media e-commerce channels.

Wholesale and Other revenue was 11.1 percent of total sales, or RMB 3.37 billion, in 2023, compared to 15.7 percent of total sales, or RMB 4.36 billion, in 2022, a 22.7 percent YOY decline.

Fila Brand Retail
As previously reported by SGB Media, retail sales, in retail value, for the Fila brand increased 25 percent to 30 percent year-over-year in the fourth quarter, a solid sequential improvement from the low-teens growth in the third quarter.

For full-year 2023, retail sales of Fila-branded product increased 16.6 percent YoY to RMB 25.10 billion, with its operating profit margin rising by 7.6 percentage points to 27.6 percent of sales. Fila brand gross margin improved 260 basis points to 69.0 percent of net sales.

The Group said the Fila growth “outpaced that of major international brands of similar scale.”

During the year, Fila’s popular “Dad Shoes,” the “Cat Claw Shoes” and “Mars Shoes” achieved annual sales of over one million pair. The retail sales of its footwear products also exceeded RM B10 billion for the first time.

There were 1,972 Fila stores at year-end, including Fila Kids and Fila Fushion standalone stores in Mainland China, Hong Kong SAR, Macao SAR, and Singapore.

The Fila segment contributed 40.3 percent of the overall revenue to the Group.

Anta self-manufacturers 11.5 percent of Fila footwear it sells and 4.5 percent of Fila Apparel sold, helping build the gross margins and operating profits.

Anta Brand
Retail sales for the Anta brand in the fourth quarter of 2023 increased in the high teens compared to Q4 2022, another strong sequential improvement from the high-single-digit year-over-year increase the segment posted in the third quarter.

For full-year 2023, sales of Anta branded products grew by 9.3 percent YoY to RMB 30.31 billion, with its operating profit margin rising 80 basis points to 22.2 percent of net sales. Anta brand gross margin rose 130 basis points to 54.9 percent of net sales.

During the year, Anta officially signed eight-time NBA All-Star Kyrie Irving, shown right, as the latest spokesperson and chief creative officer of Anta basketball products. He reportedly participated in the design of the new emblem and his signature product lines.

Other Brands
All Other Brands, including Descente and Kolon Sport, excluding Amer Sports Corp. businesses under Amer Sports Holding, (Cayman) Ltd.’s joint venture, saw fourth-quarter retail sales increase 55 percent to 60 percent compared to the corresponding period in 2022.

While significantly strong, the Q4 performance came up short of the segment’s Q3 retail sales trend, which increased 70 percent to 75 percent versus the comparable period in 2022.

For full-year 2023, retail sales of all other branded product surged by 57.7 percent YoY to RMB 6.95 billion, with the operating profit margin rising by 6.5 percentage points to 27.1 percent of net sales, sustaining its rapid upswing. All Other Brands gross margin grew 110 basis points to 72.9 percent of net sales.

There were 187 Descente stores and 164 Kolon Sport stores across Mainland China, Hong Kong SAR and Macao SAR at year-end.

Income Statement
Anta Group consolidated gross margin improved 240 basis points to 62.6 percent of net sales.

The Group’s full year operating profit margin increased by 3.7 percentage points to 24.6 percent of net sales, compared to the prior year, indicating a significant improvement in operational efficiency. From the brands perspective:

Profit attributable to equity shareholders without the effect of share of profit or loss of a joint venture increased by 44.9 percent to RMB 10,954 million. Profit attributable to equity shareholders with the effect of share of profit or loss of a joint venture increased by 34.9 percent to RMB 10,236 million.

Amer Sports
During the financial year, Amer Sports was a wholly-owned subsidiary of Amer Sports, Inc., which was a subsidiary owned by AS Holding. Amer Sports owns Arc’teryx, Salomon, Wilson, Peak Performance, Atomic, etc.

The Group effectively held 526,962 shares or 52.7 percent interest in AS Holding at year-end. The carrying amount of the investment in the joint venture was RMB 9,283 million, representing 10.1 percent of the total assets of the Group.

Before the completion of the Amer Sports Listing and the post-listing reorganization at the shareholders level of Amer Sports, Inc. on February 9, 2024, the Group accounted for AS Holding as an investment in a joint venture using the equity method in the consolidated financial statements of the Group under applicable financial reporting standards, as decisions about certain key activities of AS Holding required the consent of directors nominated by other shareholders. The summarized consolidated financial information of AS Holding disclosed in this section are based on the latest available information to the Company and following the accounting policies adopted by the Group.

Upon the completion of the Amer Sports Listing, the post-listing reorganization at the shareholders level of Amer Sports, Inc. on February 9, 2024 and the issuance of the 15,750,000 ordinary shares pursuant to the full exercise of the over-allotment option on February 12, 2024, the Group held an interest of 218,915,443 ordinary shares, representing approximately 43.33 percent of the total issued shares of Amer Sports, Inc. The Group accounts for Amer Sports, Inc. as an investment in an associate using equity method in the consolidated financial statements of the Group under applicable financial reporting standards.

Images courtesy of Anta Sports

***

See below for additional SGB Media coverage of Amer Sports, including Q4 and full year results for 2023 and the company’s lackluster IPO.

EXEC: Amer Sports Sees Q4 Growth Slow as Wholesale Declines; Posts Adjusted Net Loss

EXEC: Amer Sports IPO Comes Up Short; Some Cite China Concerns