Fila USA’s Q2 Sales Jump Double-Digits

Fila USA's revenues grew 11.5 percent in the second quarter, to $71.3 million from $63.9 million a year ago, according to the quarterly results of its parent, Fila Korea Ltd. Net earnings in the region improved slightly to $2.38 million from $1.99 million.

Gross margins declined to 28.1 percent from 28.7 percent but operating income as improved overall to 6.0 percent of sales from 5.9 percent a year ago.

In its statement, Fila Korea Ltd. noted about the Fila USA subsidiary:

•    “Fila USA has shown improvement in both sales and profit since its return to profitability in 2010.
•    Despite the competitive market conditions in the U.S., Fila USA continued to grow both the revenue and operating profit on a dollar basis.
•    Fila USA is focused on building a strong platform upon which to elevate the brand value.”

Fila Korea acquired the Fila trademark and global assets in 2007.

Companywide, Fila Korea Ltd. reported sales grew 2.7 percent in the quarter to KRW200.7 trillion ($169.7 mm). The company showed a net loss of KRW31.8 trillion ($26.9 mm) against a profit of KRW29.5 trillion a year ago. Gross margins eroded to 48.8 percent from 51.4 percent while operating income eroded to 12.6 percent of sales from 14.6 percent.

At its Fila Korea subsidiary, revenues slid 7.6 percent to KRW100.5 trillion ($84.9 mm. Net earnings rose 27.2 percent to KRW3.8 trillion ($3.2 mm). Global royalty sales for Fila Korea Ltd. reached KRW13.5 trillion ($11.4 mm), down from KRW14.9 trillion in the same period a year ago.

Fila Korea Ltd. also owns a stake in Acushnet Company, the parent of Titleist and Footjoy, and reports its results. In the second quarter, sales of Acushnet rose 2.0 percent to $446.5 million. Acushnet's earnings improved 10.9 percent to $36.5 million. Acushnet’s gross margins improved to 53.1 percent from 50.2 percent while operating income increased to 14.7 percent of sales from 13.0 percent.

Acushnet was bought by Fila Korea Ltd and Fila's South Korean partners such as Mirae Asset Private Equity for $1.23 billion in 2011. In January 2015, Acushnet chose U.S.-based Solebury Capital to advise on a potential IPO that's expected to take place in 2016. According to the terms agreed upon with its acquisition, an IPO would allow Fila Korea to boost its stake in Acushnet to about 33 percent from 12 percent in 2011, as well as reduce debt.