24Q1: Each brand's turnover grew smoothly, and inventory and discounts remained healthy
Anta Sports announced the operating conditions for the first quarter of '24. By brand, in 24Q1, the retail sales volume of the Anta brand increased by the number of units, FILA increased by a higher number of units, and the year-on-year increase of 25-30% for other brands.
Anta brand: Under the high base created by the liberalization of epidemic control in 23Q1, 24Q1 sales continued to grow smoothly. Among them, Anta's flow rate increased relatively significantly in late March, and was exceeded. At the end of the first quarter of '24, the sales ratio of Anta Warehouse was less than 5 months, improving month-on-month, and inventory continued to be optimized; retail discounts of 24Q1 both online and offline discounts improved month-on-month. By channel, Anta's online traffic increased by 20-25% year on year, and there was a marked improvement over the previous month.
FILA brand: At the end of the first quarter of '24, the inventory sales ratio was less than 5 months, improving month-on-month, and was the best in the past few quarters; retail discount 24Q1 online and offline discounts both improved month-on-month. By product and channel, FILA's big products performed better than children and trendy brands. The main influence of children and trendy brands was the net closing of online stores last year; FILA e-commerce channels continued to grow well, and online traffic increased 25-30% year-on-year in 24Q1.
Other brands: Retail sales maintained a relatively rapid growth rate. Among them, Kolon's sales growth rate was faster than that of Descente. Kolon's turnover increased by more than 50% year over year, and Descente achieved double-digit year-on-year growth.
Multiple brands continue to gain strength, and product/marketing flourish
In the first quarter, the Anta brand launched Owen's generation basketball shoe products globally, and launched Owen Zhengda basketball to incorporate Owen elements into the sphere. At the same time, the Anta brand signed a contract with the China University Basketball League in February, becoming the only designated sports equipment sponsor and the only designated ball sponsor for the tournament. The FILA brand continues to adhere to the strategy of top brands, top products, and top channels, increase the proportion of professional sports and footwear products, and continuously optimize the channel structure. Among other brands, Dison is positioned as a high-end outdoor sports brand with outstanding functionality; Kolon is positioned as an outdoor lifestyle brand, and its turnover has maintained rapid growth with the rich product line and channel expansion.
Continue to be optimistic that many brand sports leaders will move forward steadily, maintain profit forecasts and “buy” ratings. In the future, the company will continue to advance according to the three-year development plan. Anta and FILA brands will maintain a target turnover growth of 10-15% in 2024, while Descente and Kolon's revenue growth targets are no less than 20% and no less than 30%, respectively. We continue to be optimistic about the company's multi-brand collaboration as a sports leader, and the Paris Olympics will be held in July '24. We look forward to further expanding the company's influence with product and marketing cooperation. We maintain the company's profit forecast for 24-26, corresponding to the 24-26 EPS of 4.59, 4.89, and 5.57 yuan, respectively, and the 24-25 PE was 17 times and 16 times, respectively, maintaining the “buy” rating.
Risk warning: Domestic and foreign demand continues to weaken; inventory backlog; industry competition intensifies; e-commerce channel growth slows; improper cost investment, small brand cultivation, or AMER profit improvement falls short of expectations.