Fila Holdings saw group revenues in the third quarter ended Sept. 30 inch up by 1.1 percent to 927,065 million Korean won (€689.4m-$784.1m). However, the Fila brand’s revenues declined by 6.1 percent to KRW 321,194 million (€238.9m-$271.6m) without accounting for the previously reported strong contribution from Acushnet, the golf company in which the Korean group owns a controlling interest of 51 percent.
In particular, Fila licensees in EMEA suffered from supply chain constraints, leading to a 7.5 percent drop in revenues from royalties in the region, down to $7.6 million. Fila Holdings, which typically charges a licensing fee of between 6 and 7 percent on the licensees’ wholesale revenues, saw its total revenues from licenses decline by 2.9 percent to $14.0 million during the quarter.
Revenues from royalties also decreased in Asia, falling by 23.5 percent to $2.5 million, with the drop mainly traced to its licensee in Japan. Licensing revenues grew by 24.7 percent in North America and by 30.3 percent in South America, and they jumped by 62.3 percent in other markets.
On the other hand, Fila posted a 7.8 percent increase to $9.5 million in the 3 percent design fees from its joint venture with Anta Sports Products for Fila in China. The fees were 37 percent higher than two years ago.
At Fila USA, the company’s North American subsidiary, revenues edged down by 0.9 percent to $133.1 million, but the regional gross margin improved by 2.4 percentage points to 30.6 percent and the operating margin widened by 1.0 percentage point to 7.6 percent. Net profit at the unit grew by 18.8 percent to $7.7 million.
In South Korea, where the company also operates on a direct mode, Fila’s sales declined by 7.0 percent to KRW 113,268 million (€84.2m-$95.8m). While the gross margin improved by 0.7 percentage points to 59.1 percent in the company’s domestic market, due to a higher proportion of sales coming from its own stores, the operating margin narrowed by 1.0 percentage point to 17.4 percent. Net profit slipped by 21.8 percent to KRW 13,217 million (€9.8m-$11.2m). The top and bottom line were both below 2019 levels.
Globally, the number of Fila stores was off to 470 from 503 at the beginning of 2021.
All in all, Fila Holdings’ consolidated net income fell by 20.2 percent to KRW 75,923 million (€56.5m-$64.2m) in the quarter, as compared to the year-ago period. The gross margin rose by 0.3 percentage points to 48.9 percent, but the operating margin contracted to 5.1 percentage points to 11.9 percent, due to unspecified operating costs.
