Chinese sporting goods group 361 Degrees International Limited reported big earnings gains in the first half and said it will plow some of them into its fledgling U.S. running footwear business and taking on Columbia, The North Face and Mammut in its home market.
The Group, which generates the bulk of its revenues selling athletic apparel and footwear to more than 7,400 franchised retail outlets in China, reported sales reached RMB2.2 billion ($358 mm) in the six months ended
30 June, up grew 5.7 percent compared with the first half of 2014 and
22.0 percent over the previous six months.
Operating profit increased 34.4 percent to RMB485.5 million
($79 mm), underlining improving conditions in China's once glutted athletic market and providing cash for the Group's budding U.S. operation and plans to take on western snow sports brands at home ahead of the 2022 Winter Olympics in Beijing.
Group gross margin grew 160 basis points to 41.3 percent, while operating margins surged 470 basis points to 22.0 percent. Net margin was 12.2 percent, up 170 basis points. Lower cost of raw materials, particularly cotton and oil-based derivative products, helped to cushion against higher labor costs during the period.
“This promises to be a very good year for the Group as we see steady recovery in the industry and our brand gaining further acceptance in the market place,” said Mr. Ding Wuhao, President and Executive Director for the Group.
