Exceed Company Ltd. the owner and operator of the "Xidelong" brand - one of the leading domestic sportswear brands in China, released its unaudited financial results for the first quarter ended March 31, 2013.
Financial Highlights – First quarter ended March 31, 2013
- Revenue was RMB301.1 million (US$48.5 million), representing a 66.3% year-over-year decrease.
- Gross profit was RMB78.8 million (US$12.7 million), representing a 69.7% year-over-year decrease. Gross margin was 26.2%, representing a 2.8 percentage point decrease as compared to 29.0% for the first quarter of 2012.
- Operating profit was RMB15.1 million (US$ 2.4 million), representing an 89.7% year-over-year decrease.
- Net profit was RMB9.9 million (US$1.6 million), representing a 92.3% year-over-year decrease.
Shuipan Lin, Exceed's founder, Chairman and CEO, commented, "As anticipated, our results in the first quarter were impacted by weakening consumer demand in China, which was largely attributable to the domestic economic slowdown.
"As a result, overall sales volume across our main footwear and apparel product lines decreased, resulting in a decline in revenue. In response to the prevailing market conditions, we took a prudent approach to control the amount of orders placed by our distributors.
"Even though we face intense competition in the sportswear industry, we continued to stay focused on our mass market positioning. We continue to introduce a range of popular priced sportswear products to target the mass market and to better align with customer preferences.
"While we expect to continue to operate under unfavorable economic conditions for the remainder of this year, we believe we have the right strategy in place to effectively manage our production and inventory levels, maintain a lean operating structure and continue to strengthen our brand awareness.
"Our priorities for the remainder of this year will focus on strengthening our brand equity through effective marketing and maximizing the efficiency of our distribution network, and the continued execution of our long-term operational plan to align our production facilities and sales network to best capture growth opportunities in China's evolving sportswear market.
"We believe that the continued execution of our strategy and operational plan will strengthen our competitive position over the long-term and allow us to maximize our growth opportunities in anticipation of an improving macroeconomic environment."
