Some Chinese sports companies indicated that their results improved in the fourth quarter of 2021, just as China’s National Bureau of Statistics announced a better-than-expected increase of 4.0 percent in the country’s gross domestic products for the period, in spite of Covid and other challenges, leading to a growth in GDP of 8.1 percent for the full calendar year.
Furthermore, Chinese brands have apparently continued to benefit from the government-backed publicity against western brands because of their opposition to the treatment of ethnic minorities in the Xinjiang province of China.
Anta Sports Products reported growth of in the mid-teens for Anta branded products in the fourth quarter of 2021, leading to an increase of between 25 and 30 percent in their retail value for the full year as compared to 2020. Sales should show an increase in the high teens as compared to 2019 for the quarter as well as for the year.
Fila, for which Anta has the exclusive distribution in China, performed less well than before in the fourth quarter, booking a high-single-digit increase for the period, but it was up by between 35 and 40 percent from the 2019 level. Other licensed and distributed brands such as Descente and Kolon Sport were up by 30-35 percent year-on-year and up 100-105 percent from 2019.
As a result, the group is now expected to report an increase of at least 35 percent in its consolidated net earnings for the year, not including Anta’s share in the losses of an unnamed joint venture, believed to be the consortium that controls Amer Sports. Including the joint venture’s results, which had shown a big loss of 601 million yuan renmimbi in 2029, the bottom line should be up by at least 45 percent
At 361 Degrees International, retail sales recorded a growth in the high teens during the fourth quarter for the core 361° brand. The 361° Kids brand, which is accounted for separately, rose by between 25 and 30 percent.
Meanwhile, Xtep International reported a sales increase of between 20 and 25 percent in the fourth quarter. For the full year, total revenues went up by more than 30 percent, driven by the restructured Xtep Kids business and the development of e-commerce, which recorded a growth of between 35 and 40 percent in the latest quarter. Inventory turns averaged four months.
The company is now guiding for a jump in net income of at least 70 percent for the year, helped also by high gross margins and a relatively easy comparison with 2020, when Xtep’s profitability was hurt by an inventory buy-back from retailers due to the Covid pandemic.
