As a result of lockdown restrictions implemented in China and elsewhere during the Covid-19 pandemic, several Chinese sportswear brands have released profit warnings for the second quarter of 2020.
Xtep warned that retail sell-through dropped by low-single digits in the quarter. It also has higher-than-usual inventories. The group expects that net income in the first half of the year will fall by between 45 and 55 percent from the year-ago period, while revenues for the Xtep brand are expected to decrease by a mid-single-digit rate. K-Swiss and Palladium sales should also take a significant hit due to store closures in the Americas and Europe.
Meanwhile, China Dongxiang, which owns the rights to the Kappa brand in China and the global rights to Phenix, saw sales for Kappa drop by a mid-to-low single-digit rate in the fiscal first quarter ended on June 30, with store comparable sales down by mid-to-low teens. However, online sales progressed by mid-to-low thirties.
361 Degrees said that sales of its core 361º brand and 361º Kids both fell by low teens in the second quarter.
Anta Sports Products issued a warning on first-half profits, and expects profits to drop by about 25 percent compared with the first half of last year. It also forecasts a decrease in operating profit in the period, due to sales of Anta branded and certain other branded products that should be flat or down by up to 5 percent.
Li Ning has not yet revealed its second quarter results. In the first quarter, it recorded a high-teen decline in retail sales. However, it fared much better than most of its domestic sportswear peers.