Descente, owned by Japanese trading house Itochu Corp, reported record profits in the fiscal first quarter ended June 30, mainly due to an increase in equity earnings through its Anta-led Chinese joint venture.
The Japanese-based sporting goods company owns Descente and distributes Le Coq Sportif, Arena, Munsingwear, and Umbro under license. In China, a joint venture with Anta Sports (60 percent stake), Descente (30 percent stake), and Itochu (10 percent stake) holds exclusive rights to use the Descente trademark and operate stores in Mainland China, Hong Kong, and Macao.
Descente’s reported sales, including equity distributions from its China agreement, in the fiscal first quarter grew 12.1 percent to ¥27.7 billion ($176mm) from ¥24.7 billion.
Including revenues from its China joint venture, Descente’s sales grew 32.7 percent to ¥91.3 billion from ¥68.8 billion.
China’s sales jumped 42.2 percent ¥64.7 billion from ¥45.5 billion in the same period a year ago. In its statement, the company said the Descente brand in China “continued to grow strongly, and sales increased significantly.”
South Korea’s sales climbed 20.5 percent to ¥17.6 billion from ¥14.6 billion. Descente attributed the Korea gains to “significant growth” of the Descente brand, with Umbro and Munsingwear also performing “well.”
In its home market of Japan, sales improved 3.4 percent to ¥9.0 billion from ¥8.7 billion. The increases in Japan were due to a “strong performance” in the directly managed store business of Descente and wholesale growth at MoveSport, Descente’s athleisure range.
Ordinary income grew 108.7 percent to ¥9.7 billion from ¥4.6 billion a year ago, mainly due to an “increase in equity in earnings of affiliates, resulting from the growth of ‘Descente’ in China.” Net Income vaulted 83.7 percent to ¥9.0 billion from ¥4.9 billion.
Descente maintained its outlook for the current fiscal year. Sales are expected to rise 0.6 percent to ¥120.0 billion. Ordinary income is projected to move up 8.8 percent to ¥26.0 billion from ¥23.9 billion. Net income is expected to climb 39.1 percent to ¥21.0 billion from ¥15.1 billion.
Image courtesy Descente
