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 third quarter ended September 30, 2010.
Financial Highlights – Third quarter ended September 30, 2010
• Revenue was RMB832.4 million (US$124.4 million), representing a 25.8% year-over-year increase. • Gross profit was RMB252.8 million (US$37.8 million), representing a 28.3% year-over-year increase. Gross margin was 30.4%, representing a 0.6 percentage point increase as compared to 29.8% for the third quarter of 2009. • Operating profit was RMB128.1 million (US$19.1 million), representing a 91.1% year-over-year increase. • Net profit was RMB111.0 million (US$16.6 million), representing a 98.6% year-over-year increase. Shuipan Lin, Exceed's founder, Chairman and CEO, commented, "Positive brand momentum from our new 'happy lifestyle' advertising campaign and new product launches boosted our results by tapping the potential of the younger population, which is the high growth segment of the sportswear market in China. With our continued retail network expansion, in terms of both the number and size of our retail stores, we are broadening our reach in the growing sportswear market.
"During the quarter, we made progress in our plan to improve efficiency and curtail costs, as evidenced by the year-over-year improvements in gross and operating margins. Notably, our advertising campaign focuses on more cost-effective channels and techniques, such as the engagement of popular celebrities as spokespersons and national television sponsorships. As we are building positive brand momentum with our advertising and promotional initiatives, the strength of our brand equity has allowed us to improve the average selling price ("ASP") of our products.
"We expect our strong growth momentum to continue. We continue to benefit from China's consumer and sportswear market growth and the success of our growth strategies, as demonstrated by the strong growth we recorded in our 2011 Spring/Summer sales fair, which was one of the strongest in the industry. In addition, as we continue our initiative to improve our ASP and to allocate our operating costs in a more effective way, we expect to continue to expand our margins with better economies of scale."
The Company's reporting currency is Renminbi ("RMB"). RMB numbers included in this press release have been translated into U.S. dollars at the noon buying rate for U.S. Dollars in effect on September 30, 2010 in the City of New York for cable transfers in RMB per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York, which was US$1.00=RMB6.6905. The translation of amounts from RMB to United States dollars is solely for the convenience of the reader. No representation is made that RMB amounts could have been, or could be, converted into U.S. dollars at that rate orat any other rate on September 30, 2010.
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