Indicating that the Chinese sports market may be recovering at last, Anta Sports has reported that its sales rose by 24.0 percent to 5,109.8 million yuan renmimbi (€751.4m-$822.7m) in the first half ended on June 30. Footwear sales increased by 19.5 percent to represent 47.0 percent of the total turnover. Apparel grew by 27.4 percent, capturing a higher share of 48.4 percent of sales.
The gross margin improved by 1.5 percentage points to 46.6 percent, with the margin on footwear declining to 45.8 percent and apparel generating a higher margin of 48.3 percent, thanks in part to lower oil prices. The group's operating margin rose by 0.9 percentage points to 24.8 percent, helped in part by higher government grants of RMB 116.7 million (€17.2m-$18.8m). Net earnings went up by 20.2 percent to RMB 965.3 million (€141.9m-$155.4m).
The management attributed the progress to e-commerce, attractive pricing for its functional and diversified offerings, and strong demand for its children's products and its licensed Fila brand. Anta deployed strong marketing efforts focused on basketball and running, raising the ratio of advertising and promotion to revenues by 0.2 percentage points. It also raised the flexibility and efficiency of its store replenishment systems.
After the shutdown of smaller stores and the opening of larger ones in prime locations, there were 7,340 Anta stores in operation, mostly in China, at the end of the period, plus 1,334 children's sportswear stores and 544 Fila stores, the latter operating also in Hong Kong and Macau. There were also some Anta stores and concessions operated by retailers in Southeast Asia, Eastern Europe and the Middle East.
The outlook is positive. Anta has reported a low double-digit increase in orders taken at its in-house trade fair for shipment in the first quarter of 2016. It also said that sales of Anta products at partner stores, excluding those carrying only its children's sportswear, went up by a high single digit in the second quarter as compared to the same period a year ago.
The management indicated that the Chinese government's support in expanding sports participation and domestic demand for sports products, and in accelerating the development of the sports industry, would be favorable factors for Anta in the medium and long term.
