Q1海外公司收入延续偏弱表现，各地区同比增速分化，北美需求恢复仍需时间。从代表性鞋服公司2024Q1营收同比表现来看，VF(-13%)、UA(-5%)同比增速承压，Deckers(+21%)、Lululemon(+10%)、Adidas(+8%)同比增速表现较优;环比来看，多数公司相较2023Q4收入表现有所改善;分地区来看，受持续的通胀影响大多数运动品牌仍在北美地区营收承压最为显著，大中华区在去年基数恢复正常后同比增速有所下降。多数公司对北美未来销售情况仍持悲观态度，且近期下修彭博收入一致预期的公司偏多。从收入与利润水平来看，海外各公司收入与业绩同比增速有所分化，部分公司在毛利率改善以及控费能力提升下净利润增速高于营收增速，彰显较优盈利能力与运营水平。Looking ahead, it is expected that replenishment will continue, and the elasticity of replenishment depends on the strength of the demand repair at the terminal. Since 2022Q3, the overseas apparel retail industry has gradually entered the end of destocking, and the pace and continuity of subsequent export chain repairs depend on the pace of replenishment, while the elasticity of repairs depends on the strength of demand repair at the terminal.
According to the Futu Securities app, Changjiang Securities released a research report stating that Q1 overseas company revenue continued to show a weak performance, and the year-on-year growth rate in various regions varied. It will continue to be expected that replenishment will continue, and the elasticity of replenishment depends on the strength of the demand repair at the terminal. Since 2022Q3, the overseas apparel retail industry has gradually entered the end of destocking, and the pace and continuity of subsequent export chain repairs depend on the pace of replenishment, while the elasticity of repairs depends on the strength of demand repair at the terminal. Due to the fact that sports retailers still have a backlog of inventory, order placement is still cautious under weak demand compounded by destocking background, and the progress of sports retailers' destocking and the impact of future U.S. inflation trends on terminal consumption will need to be closely watched in the future.
Summary of Q1 2024: overall revenue continues to be weak and North American demand still needs to recover.
Q1 overseas company revenue continued to show a weak performance, and the year-on-year growth rate in various regions varied. Based on the revenue performance of representative apparel and footwear companies in Q1 2024, VF (-13%) and UA (-5%) had a compressed year-on-year growth rate, while Deckers (+21%), Lululemon (+10%), and Adidas (+8%) had better year-on-year growth rate performance. By comparing with Q4 2023, most companies have improved income performance. By region, most sports brands' revenue is under pressure in North America, the most affected area by persistent inflation, while the year-on-year growth rate in Greater China has declined after returning to a normal base last year. Most companies remain pessimistic about future sales in North America, and there are more companies that have recently revised down their Bloomberg consensus revenue expectations. In terms of income and profit levels, overseas companies' revenue and performance year-on-year growth rates have differentiated, and the net income growth rate of some companies is higher than the revenue growth rate due to improved gross profit margin and cost control, reflecting better profitability and operational capabilities.
Future guidance: income guidance slows down, and gross profit margin is expected to differentiate.
Looking at the FY2024/2025 guidance, the revenue guidance is relatively pessimistic, and the growth rate guidance has dropped compared to the previous fiscal year, and the gross profit margin guidance has differentiated. 1) At the revenue level: short-term inflation has significantly suppressed overseas consumption demand, and overseas companies' expectations for consumption demand are still cautious, and the growth rate guidance is mostly declining compared to the previous fiscal year. Specifically, for companies that have not yet ended FY2024, the minimum growth rate trend in subsequent quarters has differentiated, and the full-year growth rate guidance is mostly declining compared to the previous fiscal year; for companies that have already disclosed FY2024, the full-year growth rate guidance is declining compared to FY2023. 2) At the gross profit margin level: Under different promotional plans and expected transportation costs, the gross profit margin of overseas companies has changed differently.
Replenishment is expected to continue, and attention should be paid to demand repair and retail destocking.
Industry inventories have reached a healthy level, and demand recovery still needs time. From the inventory side, the YoY sales in the United States - the YoY inventory has continued to improve since July 2022 and has basically returned to a normal position. On the other hand, the inventory-to-sales ratio of U.S. retailers is currently stable at historically low levels (wholesalers are slightly higher than the historical centroids), and the inventory situation has returned to relative normality. From the demand side, the YoY growth rate of U.S. apparel retail sales is still low under high inflation, and demand is still weak; the consumer confidence index has fluctuated, and the demand needs to be restored urgently in the future.
Q1 overseas brand-side inventory continued at a healthy level, and the momentum of channel inventory repair is expected to continue. The inventory-to-sales ratio of each sector of brand-side has improved YoY, and the inventory-to-sales ratio of most sports brands except Adidas and VF has fallen below 50% historical percentile. The YoY inventory of overseas companies - YoY revenue has turned from positive to negative compared to the same period last year. Comparing with Q4 2023, the YoY decline of most companies' inventory has slowed down in Q1 2024, and most of the inventory-to-sales ratio has declined, while the inventory-to-sales ratio of the two major retailers has improved and the repair trend is expected to continue.
Looking ahead, it is expected that replenishment will continue, and the elasticity of replenishment depends on the strength of the demand repair at the terminal. Since 2022Q3, the overseas apparel retail industry has gradually entered the end of destocking, and the pace and continuity of subsequent export chain repairs depend on the pace of replenishment, while the elasticity of repairs depends on the strength of demand repair at the terminal. Due to the fact that sports retailers still have a backlog of inventory, order placement is still cautious under weak demand compounded by destocking background, and the progress of sports retailers' destocking and the impact of future U.S. inflation trends on terminal consumption will need to be closely watched in the future.
Risk warning
1. Risks of overseas demand recession;
2. Risks of slower inventory digestion than expected;
3. Risks of intensified industry competition.
