Fila Holdings got a surprising lift sales growth from Fila USA, continued contribution from Titleist and FootJoy parent Acushnet in the first quarter, but weak sales at Fila Korea and lower royalties from around the world resulted in a positive but weak first quarter for the company.

Consolidated sales for the quarter grew 6.7 percent year-over-year (YoY) to ₩1,182.6 billion for the period. Assessing the business without the benefit of FX Rate fluctuations was not so rosy as sales inched up 2.9 percent for the quarter in currency-neutral (CN) terms versus the year-ago quarter.

Gross margins were 52.1 percent of sales in the first quarter, up 80 basis points versus 50.2 percent in the 2022 first quarter. Margins rose 180 basis points in currency-neutral terms.

SG&A expenses increased 14.1 percent (+10.3 CN) to ₩452.5 billion in Q1.

Resulting operating profit was up just 1.8 percent to ₩163.3 billion in the quarter as the operating expenses increase cut into the gross margin expansion. One a currency-neutral basis, operating profits was down 2.6 percent YoY. Operating margins were 13.8 percent of sales in Q1, down 70 basis points from 14.5 percent in Q1 last year.

Net income rose 4.3 percent YoY to ₩123.3 billion in Q1, or up just 0.1 percent in currency-neutral terms.

Fila USA
Fila USA revenues saw a bit of a turnaround in the quarter, which covers the U.S., Canada and Mexico, with sales jumping 7.4 percent in US dollar terms to $64.7 million, after falling 46.4 percent in the year-ago Q1 period.

Fila USA’s gross margin expanded aggressively to 20.3 percent of sales, a sharp improvement from the 5.8 percent of sales in the year-ago first quarter in US dollar terms.

Fila USA SG&A expenses were down 2.0 percent in US dollar terms to $24.9 million in the quarter, compared to $25.5 million in the 2023 Q1 period.

Fila USA posted an operating loss of $8.1 million in the quarter, a considerable improvement from the loss of $21.9 million in the year-ago period.

Fila USA posted a net loss of $10.0 million in Q1 compared to a loss of $23.6 million in Q1 last year.

Image courtesy Fila

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For more on the results at the Acushnet company, the parent of the Titleist and FootJoy brands that is 52 percent owned by Fila Holdings, see below for SGB coverage of the company’s Q1 results.

Titleist Drives Double-Digit Q1 Growth in U.S. Market for Parent Company