Sports Apparel Stocks Outlook &Nbsp; End The Industry'S High Growth Period.
According to Hong Kong media,
Peak
Sports [2.06-3.29%] (1968) recently announced the same quarter sales growth in the third quarter, slowed sharply from 12.2% in the second quarter to 6.2%, while in the second quarter of next year, the order also slowed to 20.2% from 20.2% in the first quarter.
Management has also said that as of the end of August, it has added 470 new branches, and now plans to optimize its sales network. It will open 700 branches next year and close 500 less profitable branches.
Following Lining [7.375.74%] (2331) and China's trend [1.651.23%] (3818), PEAK sports third's sales performance has dropped, so that the problem is no longer confined to one or two companies, and the industry prospect is worrying.
The root of the problem began with sports apparel companies in the past few years.
positive
Development, a large number of stores to increase sales, when some companies reached the bottleneck of development, they found that retailers accumulated large inventory, causing the company to buy back to retailers, so as not to affect the next quarter's orders, the company will then try to sell the stock of repurchase, most of which are sold at a low price in the hypermarket.
The vicious circle of repurchase and sale
These destocking behavior not only hurts the industry
compete
Environment, because other businesses also need to follow suit, the retail outlets will be greatly discounted to attract customers to maintain sales and reduce the gross margin of distributors.
If the situation deteriorates further, distributors may ask the sports apparel Brand Company to lower the wholesale price, causing the gross margin to shrink.
Another bad effect is that if the clothing brand often sells at low prices, it will have a long-term impact on the brand image, and it will not be easy to rebuild it.
Who will be willing to buy products that can be found in hypermarkets at a high price?
Facing the growth bottleneck of industry and the fierce competition of other casual wear brands, sports
clothing
The company's high growth period will come to an end.
Anta sports [7.84-3.80%] (2020), which has always been a good seller, has also been questioned about the possible deterioration of operating data in the coming quarters and the drag on share prices.
To sum up, although the valuation of sports apparel stocks has dropped to a very low level, the industry outlook is still uncertain, so it is not appropriate to win the rebound.
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