Fila Holdings Corp. reported that Fila USA sales, which covers the U.S., Canada and Mexico, fell 16.6 percent year-over-year in the second quarter to ₩76.323 billion, compared to ₩91.530 billion in Q2 last year.
Revenues were down more in local currencies as constant-currency sales fell 20.4 percent. The quarter’s decline represented a reversal of fortune for the brand in the region. On a sequential basis, sales increased 7.4 percent in U.S. dollar terms in the first quarter.
Fila Holdings Corp. trades and reports in the Korean won (₩) currency.
The company said the decline was mainly due to the competitive market environment in the sports fashion category caused by “excessive discounting.” The company is now focusing on margin improvement and brand-centric strategies to enhance brand equity.
Fila USA’s gross margin expanded aggressively to 9.7 percent of sales, a sharp improvement from the negative 47.8 percent margin in the year-ago second quarter. The shift was due to the absence of one-time costs in the 2023 second quarter inventory reserve of approximately $24 million and improved promotional activities.
Fila USA SG&A expenses were up 9.9 percent in Korean won currency or 5.5 percent in local currency terms.
Fila USA posted an operating loss of ₩29.2 million in the quarter, a considerable improvement from the loss of ₩77.7 million in the year-ago period.
Fila USA posted a net loss of ₩32.8 million in Q2 compared to a loss of ₩79.9 million in Q1 last year.
Image courtesy Fila
