ANTA Sports Products Ltd. has revised its full-year sales forecast for its premium Fila brand, citing weak consumption in China’s economy. The sportswear maker, despite reporting better-than-expected first-half results, cut Fila’s retail sales growth guidance to high single digits from double digits, anticipating an increase in discounts to attract buyers, as outlined in a Citigroup note.
ANTA also expressed caution regarding its value-for-money Anta label, noting “some challenges” to maintaining double-digit retail sales growth in 2024. Together, the Anta and Fila brands made up approximately 87% of the company’s total sales in the first half.
Following the earnings announcement, ANTA’s shares surged by 12.1% in Hong Kong, marking the highest increase since August 2023. The company plans to use up to HK$10 billion from its cash reserves to repurchase up to 10% of its shares over the next 18 months, asserting that the current share price undervalues the company.
ANTA’s stock has experienced significant volatility this year but showed an upward trend following the latest earnings report. Citigroup, however, downgraded the company to neutral from buy in late July, forecasting moderate growth for China’s sportswear sector in the coming years.
Despite economic challenges, ANTA noted increasing demand for both high-value and luxury products among Chinese consumers. The company aims to continue its global expansion, particularly in Southeast Asia, with its Descente brand targeting new markets after debuting in Malaysia.
Additionally, Anta-backed Amer Sports, known for Arc’teryx and Wilson products, exceeded Wall Street earnings expectations and raised its full-year profit forecast. James Zheng, CEO of both brands, acknowledged the difficulty of the Chinese market amidst fierce price competition from local and international brands.
This summary provides an informative snapshot of ANTA Sports’ current market positions and strategies.
Original Story https://www.livemint.com/news/world/chinas-anta-sports-tempers-guidance-despite-profit-beat-11724959548601.html
Category :
Tags:
