Daphne's Net Profit Slipped By More Than 30%. Stock Pressure Remains Unchanged.

Following the announcement of some business operations in the two quarter last month, Daphne International's China Daily was finally released.

In the first half of this year, Daphne Net profit fell sharply by 35.68%, while the rate of opening up also slowed down. In this regard, the company pointed out that, in addition to external environmental factors, the proportion of Direct stores increased last year, resulting in increased fixed costs and negative impact on operating profits.

Insiders said that the decline in gross margin also reflected the pressure of storage in some extent, and Daphne should take some stimulant measures, otherwise the performance would continue to decline.

　　 Net profit fell by more than 30%

In the first half of this year, the turnover of Daphne increased by 1.7% to HK $5 billion 168 million from HK $5 billion 79 million in the same period last year. Net profit decreased from HK $483 million to HK $310 million, down 35.82%, the reporter noted that its revenue in 2012 increased by 22.8% compared with the same period last year, and net profit increased by 2.4% over the same period last year.

For the decline in performance, Daphne said that in addition to the consumer downturn, the bad weather and unusual cold in the spring affected the flow of shops, and further setbacks in sales. In addition, the bird flu epidemic in eastern China has also had a negative impact on the passenger flow. Therefore, the group's core brand Daphne and Shoe cabinet Although sales increased by 2.1%, the same store sales were negative. In the first half of the year, the sales of the core brand of the same store declined by 9.2%.

However, Footwear industry Ma Gang, an independent commentator, told reporters that the decline in gross profit margin reflects the change in price in order to seek market share. On the other hand, it also shows that the pressure on inventory still exists.

Daphne's stock turnover in the first half of the year increased to 209 days from 202 days in the same period last year, and its stock also increased from HK $2 billion 369 million last year to HK $2 billion 615 million as sales grew less than expected. In Ma Gang's view, such inventory turnover days are "scary".

By the end of 6, the core brands of Daphne had 6581 sales outlets, including 5690 outlets, 891 franchised stores, and a 212 increase in the number of stores, compared with the 366 increase in the same period last year. So far, the proportion of the core brand of the group has increased from 83% in the same period last year to 86%.

Daphne pointed out that the market outlook for the second half of the year is not yet clear, and the market remained weak during July and August. The group will speed up the launch of autumn and winter products and expect sales growth in autumn and winter.

　　 The three or four tier cities still have great potential.

According to Daphne 2012, the proportion of Direct stores rose from 81% at the end of 2011 to 83%, and now the proportion is nearly 90%.

In this regard, analysts believe that to join the trend is a trend, but the industry continues to slump, to a certain extent, so that the Daphne channel to narrow the scope of the sale of the corresponding impact.

Zhu Qinghua, a researcher at CIC light industry, told reporters that in fact, "the inventory of franchised stores is not included in the company's inventory, while the inventory of Direct stores is directly included in the company's inventory, and the company's implementation of the strategy of franchising is inevitable." Although franchising will increase the company's stock in a short time, it is wise to shape the brand image of the company.

However, Ma Gang pointed out that with the current changes in the proportion of Direct stores, the impact of franchising is not large. "The recession of consumption is not formed in the short term, nor is it going to recover in the short term. Daphne should have stimulant actions to stimulate consumption, or expand consumption by expanding market range and commodity range, otherwise the situation will be worse."

In response to the current industry situation, Daphne said it would increase sales efficiency and promote sales growth in the same store. In view of this, Ma Gang believes that Daphne has been franchising for some time. For Direct stores, there is limited room for endogenous growth through upgrading management.

Zhu Qinghua told reporters that Daphne's main brand has great potential in the development of the three or four tier cities. "The bottlenecks that may come next are mainly the speed of product updates and the style of design."