China Xiniya Fashion Limited, a leading provider of men's business casual apparel in China, reported financial results for the first quarter of 2014. The Company publishes its financial statements in Renminbi ("RMB").
First Quarter 2014 Highlights
-Revenue during the first quarter of 2014 decreased by 7.5% to RMB204.6 million, as compared to RMB221.2 million in the first quarter of 2013, which is within the prior guidance of a decrease of 7%-11%.
-Gross margin was 29.6% in the first quarter of 2014 as compared to 30.7% in the first quarter of 2013.
-Net profit in the first quarter of 2014 declined by 19.9% to RMB26.6 million as compared to RMB33.2 million in the first quarter of 2013.
Earnings per ADS were $0.08 in the first quarter of 2014 as compared to $0.09 per ADS in the first quarter of 2013, which is above the prior guidance of $0.03-$0.07 per ADS.
Xiniya's network of authorized retailers had a net reduction of 69 retail outlets in the first quarter of 2014, consisting of 13 new retail outlets opened and 82 retail outlets closed. The total number of authorized retail outlets was 1,514 as of March 31, 2014.
The Company held its Fall and Winter Collections Sales Fair in mid-April 2014 in Xiamen City, Fujian Province. The Company's distributors and authorized retailers in attendance placed their purchase orders for Xiniya's latest fall/winter collections. Xiniya exhibited over 2,000 new products during the week-long sales fair including apparel, shoes, bags and accessories for distributors and authorized retailers to select from based on each store's location, climate and local consumer taste. Deliveries will take place during the second half of 2014.
The distributors will then either deliver these products to authorized retailers or display them in their own retail outlets. The value of total purchase orders decreased 48% when compared to the value of total purchase orders placed during the same period last year.
The Company renewed its celebrity endorsement contract with Jacky Cheung, one of the most well-known pop singers in China. Mr. Cheung has represented the Xiniya brand since October 2007.
-Revenue in RMB for the second quarter of 2014 is expected to decline in the range of 15% to 10%.
-Earnings per ADS in the second quarter of 2014 are expected to be in the range of -$0.04 to +$0.01.