Descente, without the benefit of a one-time gain it had in Q1, realized a 15.2 percent decline in operating profit to ¥4.15 billion (€25.6m) despite a 4.9 percent increase in revenues to ¥60.0 billion (€370.5m) for the three months ended Sep. 30. Sales of athleticwear improved in the period, but golfwear sales declined. Quarterly net income improved by 10.5 percent to ¥5.7 billion (€35.2m) as gross margin rose by 160 basis points to 59.8 percent from 58.2 percent.
Regionally, the group generated a strong increase in operating income and sales in China due to the incorporation of affiliated companies. China operating profit rose by 85 percent to ¥241 million (€1.5m) on 222 percent sales growth to ¥7.1 billion (€43.9m). Arena sales rose by 52 percent to ¥1.47 billion (€9.1m), Descente sales increased by 69 percent to ¥42.9 billion (€265.3m), and Le Coq Sportif sales improved 27 percent to ¥5.0 billion (€30.7m). The group ended Q2 with 725 stores in China, including 314 for Le Coq Sportif and 191 arena doors.
In South Korea, quarterly operating income fell by 13 percent to ¥1.74 billion (€10.8m) as sales declined by 1.7 percent to ¥27.8 billion (€171.6m). Umbro, popular with Gen Z consumers in the region, had a 25 percent sales increase to ¥6.0 billion (€38.6m). Among other brands, Descente sales dipped by 4.3 percent to ¥12.5 billion (€77.5m), and area sales increased by 61 percent to ¥5.7 billion (€31.3m). The parent is working to reduce its ratio of outlet stores in the market. It ended Q2 with 277 Descente stores, 203 for Le Coq Sportif, 143 for Arena and 117 Umbro retail locations for a total of 775 doors in the country.
In Descente’s home market of Japan, operating income slid by 36 percent to ¥2.1 billion (€12.7m) on a 6.7 percent sales drop to ¥24.0 billion (€148.2m) due to a flattening of golf sales and no longer distributing the Marmot brand. Descente sales slipped by 6 percent to ¥4.9 billion (€30.1m), fell by 9.3 percent for Umbro to ¥5.7 billion (€35.2m), and rose by 3.9 percent for Umbro to ¥1.2 billion (€7.5m). The group, which is working to refresh its retail stores in Japan, ended the period with 58 locations.
