Higher SG&A costs related to additional brand promotions contributed to a 12 percent decline in Q3 operating income to ¥6,434 million (€40.2m) at Descente. But higher athleticwear sales offset a decline in golf apparel sales and led to a 4.6 percent gain in total revenues to ¥90,100 million (€56.3m) for the period ended Dec. 31. Net profit, impacted by the loss of a ¥2.5 billion (€15.6m) in the year-ago period related to a consolidation, fell by 18.0 percent to ¥11,000 million (€68.8m). Gross margin, bolstered by a strong DTC business in Japan, rose by 240 basis points to 60.0 percent.
Regionally, higher expenses related to a rebranding effort combined with the deprecation of goodwill related to a prior-year consolidation contributed to 84 percent drop in China’s operating income to ¥42 million (€263,000) despite a 186 percent year-over-year sales growth to ¥10,403 million (€65.0m). Sales of each brand recovered by double-digits from the 2022 lockdown. Descente sales increased by 58 percent to ¥61,310 million (€383.0m). Revenues jumped by 25 percent to ¥7,046 million (€44.0m) at Le Coq Sportif; by 37 percent to ¥2,539 million (€15.7m) at Arena, and by 25 percent to ¥993 million (€6.2m) at Munsingwear.
In South Korea, the group said the impact of a downward trend in golf continues, but Umbro sales surged by nearly 23 percent to ¥8,595 million (€53.7m). Total market revenues rose by 5 percent in Q3 to ¥47,356 million (€295.8m). Elsewhere, strong beach-category sales pushed Arena sales up 36 percent to ¥9,437 million (€58.9m). Descente sales dipped by nearly 2 percent to ¥18,176 million (€115.4m) as Le Coq Sportif sales slipped by 11 percent to ¥9,639 million (€60.2m).
In Descente’s home market of Japan, where the number of stores was flat year-over-year, DTC grew to 45 percent of all revenues from 42 percent in the year-ago quarter. Total market sales fell by 8.1 percent to ¥34,208 million (€213.7m). Descente sales were off by 1 percent to ¥9,601 million (€60.0) but were up by 6.6 percent for Umbro at ¥1,770 million (€11.1m) and 1.5 percent for Arena at ¥3,133 million (€19.6m).
The group ended the period with 58 retail doors in Japan, 772 in South Korea and 734 in China, where Le Coq Sportif had the most (311), followed by Arena (198).
