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Shares of the Chinese sportswear company experienced a significant decline after reporting an 8.9% drop in profits for the first half of the year, despite achieving record-high revenues driven by its multi-brand approach. The stock fell 6.8%, closing at HKD 94.70 (approximately USD 12.15) per share as of 2:05 p.m. local time, after initially dropping as much as 7.5%.
The company’s net profit for the six-month period ended June 30 was just over 7 billion yuan (around USD 978.5 million), compared to the previous year, according to a financial report issued yesterday. Revenue increased by 14%, reaching 38.5 billion yuan (about USD 5.4 billion). When excluding the gain from share dilution related to the listing of its outdoor brand, Amer Sports, last February, net profit rose by 15%.
Revenue growth was seen across multiple brands: the Anta brand’s revenue increased 14% to 16.1 billion yuan; Fila’s revenue grew 6.8% to 13.1 billion yuan; and all other brands combined saw a 42% jump to 4.6 billion yuan.
The company’s chairman emphasized the importance of a diverse, multi-brand portfolio for sustained growth. “We believe that our differentiated and highly complementary multi-brand strategy is the main driver of ongoing success,” he said during an earnings call. “We remain dedicated to bolstering our current brands by unlocking their growth potential while also pursuing strategic acquisitions.”
Additionally, a new management team has been established to develop a three- to five-year revitalization plan for Jack Wolfskin, an outdoor gear brand acquired earlier this year. The focus will be on reshaping its product offerings and brand identity around core values to strengthen its market position.
On the same day, the company announced a partnership with the fashion giant Musinsa to create a joint venture called Musinsa China. The Chinese firm will hold a 40% stake, with the remaining 60% owned by South Korea’s Musinsa. The deal is still pending regulatory approval but is expected to be finalized by the end of next month.
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