Net sales of Japan's Descente 27,162 mn yen in Q1 FY24, 2.8% YoY rise

The rise was despite a slowdown in the golf boom due to the diversification of leisure demand, and the impact of sales decrease by Marmot, whose licensing agreement was terminated at the end of December last year.

Gross profit increased by 5.9 per cent YoY in Q1 FY24 to 16,512 million yen due to the consolidation of subsidiaries mentioned above and the impact of improved gross profit margins in South Korea segment due to the improved sales of regular price items, the company recently said in a financial statement.

Operating income decreased by 22.9 per cent to 1,951 million yen due to the absence of a one-time gain of approximately 470 million yen in the same quarter of the previous fiscal.

Due to the growth in the performance of equity-method affiliates Descente China Holding Ltd (DCH) and Arena Korea Ltd (AK), equity in earnings of affiliates increased significantly by 301.8 per cent YoY to 2,271 million yen, and ordinary income increased by 34.3 per cent YoY to 4,490 million yen.

In addition to strong sales by inbound tourism in Japan, mainly by Asian tourists at directly managed stores, sales of ‘umbro’, which focuses on products for children, grew.

However, due to the impact of the termination of Marmot licensing agreement and the expected slowdown in the golf boom, segment net sales decreased by 8.4 per cent YoY in Japan to 11,079 million yen. Segment income decreased by 48.1 per cent YoY to 714 million yen.

Sales of ‘umbro’ continued to grow in South Korea, but sales in the golf wear category declined as a result of the rebound from the golf boom in the same quarter of the previous fiscal.

Segment net sales in that country decreased by 3.4 per cent YoY during the quarter to 12,274 million yen.

The liberalisation of movements from the mainland to Hong Kong supported the strong performance of Hong Kong Descente Trading, Ltd.

Fibre2Fashion News Desk (DS)