Exceed delivers healthy Q1 results
Exceed Company Ltd, the owner and operator of "Xidelong" brand - one of the leading domestic sportswear brands in China, released its unaudited financial results for the first quarter ended March 31, 2012.
Financial Highlights – First quarter ended March 31, 2012
• Revenue was RMB894.6 million (US$142.1 million), representing a 19.0% year-over-year increase.
• Gross profit was RMB259.8 million (US$41.3 million), representing a 11.7% year-over-year increase. Gross margin was 29.0% representing a 2.0 percentage point decrease as compared to 31.0% for the first quarter of 2011.
• Operating profit was RMB147.3 million (US$23.4 million), representing a 14.8% year-over-year increase.
• Net profit was RMB128.0 million (US$20.3 million), representing a 3.1% year-over-year increase.
Shuipan Lin, Exceed's founder, Chairman and CEO, commented, "We delivered healthy results for the first quarter with revenues exceeding our guidance, supported by especially strong growth in footwear sales.
"Overall consumer demand remained stable during the first quarter, and we continue to benefit from the prudent expansion of our distribution network and our ongoing marketing and branding efforts. We are pleased to see that our 'happy lifestyle' branding theme continues to resonate with younger generations who are seeking fashionable and functional products at a good value.
"We will continue to focus our marketing and branding initiatives, including the ongoing refurbishments and upgrades to the retail selling locations operated by our distributors and authorized third-party retailers and our promotional initiatives to gain a further share of the growing sportswear market in China.
Looking ahead, we expect to face increasing headwinds as our distributors have adopted a more conservative approach given the uncertain macroeconomic environment in China and abroad. As a result, we have revised our estimate for the total value of the wholesale orders placed during the Spring/Summer and Autumn collection sales fairs which has consequently impacted our outlook for the full year 2012.
"Nevertheless, we remain committed to our strategy to strengthen our brand equity through effective marketing and expansion of our distribution network. In addition, we are continuing to execute our operational plan to maximize our growth potential in the evolving PRC domestic sportswear market.
"We believe our plan is a critical element of our long-term growth strategy, as increasing internal manufacturing capacity will allow us improve our bargaining power and provide more stability to our supply chain, which we believe will ultimately allow us to drive gross margin expansion over the long term.
"We believe that our ongoing strategic and tactical initiatives, coupled with the execution of our share repurchase program, will position us to deliver increasing value to our shareholders over time."
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Exceed Company Ltd
Exceed Company Ltd