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Revenues dive 20.1% at Zuoan Fashion in Q3

December 20, 2013 (China)

Zuoan Fashion Limited, a leading design-driven fashion casual menswear company in China, announced its financial results for the third quarter ended September 30, 2013.
 
Third Quarter 2013 Financial Highlights 
Revenues in the third quarter of 2013 were RMB380.5 million ($62.2 million), a decrease of 20.1% from RMB476.3 million in the same quarter of 2012. 
Gross profit in the third quarter decreased 30.3% year over year to RMB155.8 million ($25.5 million) from RMB223.6 million in the same quarter of 2012.  
Gross margin was 40.9% compared with 46.9% in the prior year period and 44.1% in the second quarter of 2013.  
Net income was RMB23.0 million ($3.8 million), a decrease of 75.3% from RMB92.8 million in the same quarter of 2012. 
Diluted earnings per ordinary share was RMB0.21 ($0.03) in the third quarter, equivalent to RMB0.83 ($0.13) per ADS, compared to diluted earnings per ordinary share of RMB0.83 ($0.14) or RMB3.34 ($0.55) per ADS in the third quarter of 2012.
 
Third Quarter 2013 Financial Performance
Revenue for the third quarter of 2013 was RMB380.5 million ($62.2 million), representing a decrease of 20.1% from RMB476.3 million in the same quarter of 2012. The decrease was primarily attributed to a cancellation of sales orders for the Company's Fall/Winter collection 2013 back in June, due to the economic downturn in the menswear sector during the second half of 2013. 
 
During the quarter, distributor sales decreased by 16.0% to RMB378.3 million from RMB450.2 million in the same quarter of 2012. Third quarter 2013 self-operated direct store sales decreased to RMB2.2 million from RMB2.9 million in the same quarter of 2012. A net total of 309 distributor and sub-distributor stores were closed in the third quarter of 2013, resulting in a total of 1,074 store locations as of September 30, 2013 compared to 1,383 store locations at the end of the second quarter.  
 
Cost of sales decreased by 11.1% to RMB224.7 million ($36.7 million) in the third quarter of 2013 from RMB252.7 million in the same quarter of 2012, in-line with the revenue decrease associated with cancelled sales orders. As a percentage of revenues, cost of sales increased to 59.1% in the third quarter of 2013 from 53.1% in the same quarter of 2012. 
 
 

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