With an approximate €100 million profit contribution from its Acushnet golf subsidiary, Fila Holdings reported a net profit of 100,434 million Korean won (€70.3m) against a profit of KRW 37,197 million for the period ended June 30. The Q2 operating profit increased by 45 percent on a constant-currency basis to KRW 140,147 million (€98.1m) compared to KRW 91,943 million. Gross margin improved by 640 basis points to 53.0 percent from 46.6 percent.
Q1 consolidated group revenues fell by 1.3 percent to KRW 1,175,289 million (€822.7m) from KRW 1,147,006 million but were up 2.5 percent on a reported basis. The group said strong brand performance in China and a solid response to new products in Korea were offset by ongoing market competitiveness in the US.
Fila USA reported a gross profit of KRW 7,418 million due to the absence of one-time costs in the year-ago quarter related to promotional activities and a $24 million inventory reserve. On a constant-currency basis, revenues declined by 20 percent to KRW 76,323 million (€53.4m). The operating loss improved 62 percent to KRW 29,180 million (€20.4m) versus a loss of KRW 77,077 million. The segment’s net loss was KRW 32,804 million (€23.0m).
Fila Korea’s operating income increased 32 percent year over year to KRW 19,109 million (€13.4m) from KRW 14,497 million despite a modest 0.5 percent improvement in revenue to KRW 95,047 million (€66.5m). The sales gain was achieved by a 14 percent jump in design service income to KRW 19,755 million (€13.8m).
Global royalty revenues fell on a constant-currency basis in all regions, including a 21 percent drop in the EMEA to KRW 8,352 million (€5.8m), a 28 percent drop in North America to KRW 900 million, and a 7.8 percent contraction in Asia to KRW 5,339 million (€3.7m).
The company maintains its FY24 outlook, which calls for a 30 to 40 percent year-over-year improvement in consolidated operating profit.
