Revenue of 23 billion yuan increased 2.5%, net profit of 1.12 billion yuan increased 76%; the company released 23 annual financial reports; 23Q4 revenue of 4.76 billion yuan increased 8.5%, net profit due to mother decreased 21%, net profit of 290 million yuan decreased by 21%, net profit not attributable to mother 250 million decreased by 25%; net profit attributable to mother increased by 2.5%; net profit attributable to mother of 1.12 billion yuan increased 76% after deducting net profit of 1.02 billion yuan, accounting for 74% of the company's net profit in 23 Since listing, the dividend rate has reached 74.2%.
Looking at terminal retail, the company's full-system terminal retail sales increased by 3.4% in '23, improving quarter by quarter; 24Q1 full-system terminal retail increased 1.6% year-on-year, with Semma down 1.5% and Balabara increasing by 3.3%.
In '23, the company continued to promote organizational transformation, model innovation, and process reengineering, strengthen retail business organizational capabilities, and comprehensively implement new retail models to achieve mutual empowerment of online and offline, direct and franchise businesses, improving the quality and efficiency of the company's operations, increasing gross margin year-on-year, and gross profit increasing year-on-year; at the same time, inventory operation efficiency increased year-on-year, inventory turnover decreased year-on-year, and asset impairment losses decreased year-on-year.
Offline channels have clearly recovered, and Barabara has maintained steady growth
By product, casual wear revenue of 4.17 billion yuan decreased by 3%. Semma's global image was upgraded, and the new basic store pilot was successfully piloted to enhance the consistent brand experience; children's apparel revenue of 9.37 billion yuan increased by 5%. Barabara continued to deepen the development of mental categories, accelerate the incubation of sports and outdoor product lines, and promote Asics and Puma children's brand agents.
By channel, online revenue of 6.23 billion yuan decreased by 3.5%, franchise revenue of 5.78 billion yuan increased 10%, direct revenue of 1.37 billion increased 19%, and joint revenue of 160 million decreased by 52%.
By region, domestic revenue of 13.6 billion yuan increased 2.4%; overseas revenue of 43.94 million increased 19%. By the end of 2023, the company had 70 stores in Hong Kong, China and overseas, and Barabara successfully opened its first store in Singapore at the end of 23.
The gross profit margin reached a record high of 44% in 23, a net profit margin of 8.2% with a 3.6 pct23q4 gross profit margin of 43.8%, the same increase of 0.7 pct, a gross profit margin of 44% in 23, an increase of 2.7 pct. The increase may be an effective increase in the company's product strength, an increase in discounts on new online products, and an increase in the same price ratio of the same model across the region. By product, the gross profit margin of the leisure category decreased by 38% by 2 pcts, and 46.8% of children increased by 5 pcts; by channel, 43% of online sales increased by 4.2 pcts in '23, 67.6% of direct sales increased by 2.5 pcts, and 39.2% increased by 1.9 pcts.
23Q4 net interest rate of 6.1% decreased by 2.1 pct, mainly due to an increase in operating efficiency of 2.5 pct; in the whole year, the net interest rate increased by 8.2% and 3.6 pct, and the period rate decreased by 1.1 pct. Among them, the sales rate decreased by 24.1% by 0.4 pct, the management rate 4.6% increased by 0.2 pct, the R&D rate decreased by 0.2 pct, and the finance rate -1.2% decreased by 0.8 pct, mainly due to the increase in interest on time deposits.
Promoting channel adjustment and optimization and digital construction. By the end of '23, the company had a total of 7,937 stores down 203; by product, 2,703 stores were reduced by 48, and 5,234 children were reduced by 155; by channel, 681 direct-run companies were reduced by 42, and the number of 7164 franchised companies decreased by 172.
At the same time as store adjustments, we believe that the main reason is improving floor efficiency to drive offline growth, and digital construction helps improve efficiency. The company's average floor efficiency in '23 was 9425 yuan/year, an increase of 36.3% over the previous year. In addition to channel adjustments, Semma's new basic store pilot was successful in '23. The store efficiency exceeded expectations, the product efficiency was higher than that of ordinary stores, and subsequent replication was promoted; Barabara vigorously promoted the “retail-product-display” trinity strategy, and the effectiveness of participating stores improved markedly.
Update profit forecasts and maintain “buy” ratings
The company continues to promote the implementation of new retail models. In 24, it plans to focus on improving product operation efficiency, speeding up channel construction, continuing to improve digital operation capabilities, and at the same time accelerate overseas business layout to explore incremental markets.
Considering the pace of store adjustments, we adjusted the profit forecast. The company's revenue for 24-26 was 152 billion, 168, and 18.4 billion (the previous 24-25 values were 1.54 billion and 17.17 billion, respectively), the net profit to mother was 13.5, 15.3, and 17.01 billion yuan (the previous 24-25 values were 1.42 billion yuan and 1.64 billion yuan, respectively), and EPS was 0.5, 0.57, and 0.64 yuan/share, respectively (24-25 years ago values were 0.53 and 0.61 yuan/share, respectively), and the corresponding PE was 11.7, 10.3, 9.2 times.
Risk warning: macroeconomic fluctuations, brand operation, changes in raw material prices, inventory management and price reduction, import and export trade; implementation of dividend plans falls short of expectations, etc.