A 269 percent gain in investment income boosted operating and net earnings at China Dongxiang for the financial year ended March 31. While its revenues went up by 27.8 percent to 1,970 million yuan remimbi (€255.0m-$304.5m), the Chinese sportswear company’s net income showed a fourfold increase to RMB 1,811 million (€234.4m-$279.9m) from RMB 366 million in the prior year.

The gross margin declined by 0.8 percentage points to 65.6 percent across the group before an impairment on inventories. The operating margin surged by 70.7 percentage points to 105.1 percent, but it would have risen by only 4.2 percentage points to 3.0 percent excluding investment income of RMB 2,095 million (€271.2m-$323.8m).

The Kappa brand alone, for which the company has the rights in China, saw its gross margin decline slightly by 1.2 percentage points to 68.4 percent. It stood at 71.4 percent in apparel, 55.5 percent in footwear and 81.5 percent in accessories.

Sales of adult apparel under the Kappa brand increased by 29 percent to RMB 1,388 million (€179.7m-$214.5m), representing 78 percent of the total revenues. The Kappa Kids apparel business grew by 36 percent to RMB 120 million (€15.5m-$18.5m). Sales of footwear rose by 27 percent to RMB 356 million (€46.1m-$55.0m). Sales of other products – mostly under the Japanese Phenix brand – inched up by 5 percent to RMB 68 million (€8.8m-$10.5m).

As the coronavirus epidemic was practically over at the beginning of the company’s financial year, sales through the offline channel rose largely in line with the total turnover, representing 72 percent of it excluding the Kappa Kids segment. The number of stores went up by 41 to 1,170 units. Revenues from e-commerce went up by 31.7 percent.