27 August 2025 | 10:35PM HKT Anta Sports Products (2020.HK) Earnings review: Solid multi-brand execution to navigate through choppy near-term trend; Buy (on CL) 2020.HK 12m Price Target: HK$121.00 Price: HK$101.60 Upside: 19.1% Anta reported a healthy 1H25 core OP / NP beat at noon. The share price retreated slightly 2% today as messages from analyst briefings were a mixed bag: On one hand, 1) mgmt lower Anta core sales guidance (MSD%, from HSD% prior) and an unchanged Fila outlook (MSD%, despite 1H +8% yoy ...

Key Takeaways NIKE's Air Force 1, Dunk, and AJ1 are fading, creating a $1B revenue headwind in FY25.New launches like the Vomero 18 and Aja Wilson's line show strong early sales momentum.NIKE leans on sport-specific teams, wholesale support, and premium DTC focus for recovery.NIKE Inc. (NKE) is at a turning point as some of its most iconic franchises, like the Air Force 1, Dunk and AJ1, are fading in consumer demand. The company has deliberately taken steps to rightsize these franchises, even as it created ...

Group 1 - The article discusses Nike stock (NYSE: NKE) and its potential impact from the upcoming Paris Olympics, suggesting it could be a turning point for the company [1] - The previous coverage of Nike stock was over a year ago, indicating a long-term interest in the company's performance [1] Group 2 - Sensor Unlimited, an economist with a PhD, has a decade of experience in covering the mortgage market, commercial market, and banking industry, focusing on asset allocation and ETFs [2]

Summary of Anta Sports Products Research Call Company and Industry Overview - **Company**: Anta Sports Products (2020.HK) - **Industry**: Sportswear and Outdoor Equipment Key Points and Arguments 1. **Amer Sports Performance**: Amer Sports reported a solid 2Q performance with an adjusted EPS of $0.06, exceeding consensus estimates of $0.02/$0.03. Revenue grew by 23.5% year-over-year, surpassing expectations of 17.8%/17.9% [1][3] 2. **Guidance Update**: Amer Sports raised its FY25 adjusted EPS guidance to $0.67-$0.72 from a previous range of $0.64-$0.69, indicating strong revenue growth expectations of 20%-21% year-over-year [1][3] 3. **Greater China Growth**: The Greater China market for Amer Sports showed robust growth of 42% year-over-year, maintaining momentum from the previous quarter [2][8] 4. **Positive Outlook for Anta**: The strong performance and guidance from Amer Sports are expected to positively impact Anta's investment income, with an anticipated associate income contribution of approximately RMB1,046 million, representing about 8% of Anta's net income [3][7] 5. **Market Dynamics**: The outdoor segment in China remains strong, attracting younger consumers and luxury shoppers, which is beneficial for Anta's brands like Descente and Kolon [3][8] 6. **Internal Competition**: There are discussions regarding internal competition within Anta's outdoor brand portfolio; however, the company is expected to leverage consumer insights to differentiate its brands and capture segmented demand [3][8] 7. **Tariff Management**: Amer Sports management expressed confidence in managing higher tariffs due to strong pricing power and a diverse global footprint, expecting negligible impact on their business in 2025 [9] 8. **Salomon's Growth**: Salomon's footwear revenue accelerated by 35% year-over-year, indicating positive implications for Original Equipment Manufacturers (OEMs) like Yue Yuen and Feng Tay [10] Additional Important Insights 1. **Retail Strategy**: Amer Sports plans to optimize its retail footprint by closing less productive stores and focusing on high-quality direct-to-consumer (DTC) locations [11] 2. **Sales Trends**: Anta's retail sales growth has shown fluctuations, with e-commerce growth rates between 20-25% in previous quarters, while offline sales have been more variable [12] 3. **Valuation and Risks**: Anta is rated as a Buy with a 12-month price target of HK$117, reflecting a potential upside of 20%. Key risks include weaker brand growth and discount pressures [17][18][20] This summary encapsulates the critical insights from the research call regarding Anta Sports Products and the broader sportswear market dynamics, highlighting both opportunities and risks for investors.

Financial Performance - Group revenue reached RMB 6838 million, a 71% year-over-year increase[3] - Operating profit increased by 91% to RMB 1305 million, with an operating profit margin of 191%[3] - Profit attributable to ordinary equity holders of the company increased by 215% to RMB 914 million[3] - Basic earnings per share increased by 165% to RMB 346 cents[6] Segment Performance - Mass market revenue increased by 45% to RMB 6053 million[3, 11] - Professional sports revenue increased significantly by 325% to RMB 785 million[3, 11] Balance Sheet Highlights - Net cash and cash equivalents increased significantly by 943% to RMB 1913 million[7] - Shareholders' equity increased by 135% to RMB 9876 million[7] Brand Performance & Strategy - Xtep is the No 1 running brand in China, with leading overall wear rate in major marathons[18, 19] - Core Xtep brand revenue increased, with footwear accounting for 584% of revenue[75] - Saucony & Merrell brands experienced revenue growth, with overall revenue increasing by 325%[83] Sustainability - The company recycled approximately 3000 kg of clothes and reduced carbon emissions by over 10000 kg[52, 53]

Core Insights - NIKE Inc.'s EMEA strategy is positioned as a significant growth driver for fiscal 2026, focusing on marketplace cleanup and an integrated digital channel strategy [1][8] - The EMEA region showed growth in key performance categories, including running and training, with women's sportswear footwear returning to growth [1][3] - The company ended the quarter with inventory slightly above targets and a healthier balance of full-price sales [1] EMEA Strategy - A key component of NIKE's EMEA strategy is the "sport offense" realignment, which involves dedicated cross-functional teams to enhance athlete relationships and tailor product offerings [2] - This approach allows NIKE to align local consumer demand with sport-specific product pipelines, such as high-performing running footwear and expanded women's basketball offerings [2] - The strategy supports sharper marketplace segmentation, enabling unique assortments for wholesale partners while maintaining premium positioning in NIKE Direct [2] Growth Expectations - NIKE anticipates that the EMEA region will benefit from a stronger holiday order book and growth in performance categories, which will help offset declines in classic franchises [3] - Improved wholesale sell-through rates, healthier inventory levels, and higher full-price sales penetration are expected to support momentum in the region [3] - If the sport offense model continues to generate consumer excitement and channel profitability, EMEA could be crucial for the company's sustainable growth in fiscal 2026 [3] Competitive Landscape - Key competitors for NIKE in the global market include adidas AG and lululemon athletica inc. [4] - adidas leverages its heritage in performance sports and lifestyle segments, maintaining a strong presence in markets like EMEA and Asia-Pacific, while focusing on innovation and sustainability [5] - lululemon has established a premium niche in athletic apparel and is expanding into high-performance categories, benefiting from a vertically integrated model [6] Financial Performance - NIKE shares have declined by 1.1% year to date, compared to the industry's decline of 5.2% [7] - The company trades at a forward price-to-earnings ratio of 40.07X, higher than the industry average of 29.34X [9] - The Zacks Consensus Estimate indicates a year-over-year decline of 12.04% in fiscal 2025 earnings, with a projected growth of 1.9% in fiscal 2026 [10]

Financial Data and Key Metrics Changes - The company reported net sales of CHF 749.2 million, representing a 38% increase on a constant currency basis and a 32% increase on a reported basis year-over-year [6][32] - The gross profit margin expanded to 61.5%, an increase of 160 basis points year-over-year, while the adjusted EBITDA margin reached 18.2%, up 220 basis points year-over-year [7][41] - Adjusted EBITDA was CHF 136.1 million, reflecting strong operational performance and top-line growth [43] Business Line Data and Key Metrics Changes - Direct-to-consumer (D2C) sales reached CHF 308.3 million, up 54.3% year-over-year at constant currency, elevating the D2C mix to 41.1% of total sales [32] - The apparel business saw net sales grow by 75.5% at constant exchange rates, reaching CHF 36.7 million, indicating strong consumer engagement [40] - Net sales from shoes grew by 36% at constant exchange rates, with notable demand in both performance and lifestyle categories [39] Market Data and Key Metrics Changes - EMEA region net sales grew by 46.1% year-over-year at constant currency, reaching CHF 197.8 million, marking the strongest growth in two years [35] - The Americas experienced a 23.6% increase in net sales at constant currency, totaling CHF 432.3 million [36] - The APAC region delivered triple-digit growth of 110.9% year-over-year, with net sales reaching €119.2 million [38] Company Strategy and Development Direction - The company aims to build resilience in its product portfolio and expand its presence in multiple sports, transitioning from running to include trail, outdoor, tennis, and training [12][20] - The strategic focus includes enhancing brand perception and expanding the apparel line, with plans for high-profile product launches and collaborations [11][29] - The company is committed to innovation in manufacturing, exemplified by the launch of the Light Spray factory, which aims to streamline production processes [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum and growth potential, citing strong performance across all regions and product categories [25][50] - The company anticipates continued strong demand despite potential macroeconomic challenges, with an increased guidance for net sales growth to at least 31% year-over-year [50][51] - Management emphasized the importance of maintaining premium positioning and investing in long-term growth initiatives [52][53] Other Important Information - The company has been recognized as one of the world's 50 most innovative companies by Fast Company, highlighting its commitment to technological advancements [18] - The company ended the quarter with a cash balance of CHF 846.6 million, down from CHF 871.8 million, primarily due to foreign exchange impacts [47] Q&A Session Summary Question: What gives confidence to raise constant currency sales growth guidance despite potential tariff impacts? - Management highlighted strong brand momentum and growth across all regions and product categories, with July being the strongest month in the brand's history [57][58] Question: Can you discuss the expected revenue growth trends in wholesale and D2C for the second half? - Management noted that while they expect some deceleration, the focus remains on durable, high-quality growth, with strong performance in D2C channels [68][70] Question: What are the levers for additional margin expansion given current performance? - Management indicated opportunities for increased gross profit margin through a higher D2C mix, economies of scale, and continued investment in brand-building initiatives [72][74] Question: Can you elaborate on the impact of new product launches on future momentum? - Management expressed excitement about the ongoing development of franchises and the introduction of new products, which are expected to sustain momentum into 2026 [79][83] Question: How is the company managing working capital and inventory levels? - Management reported improvements in demand and supply planning, allowing for lower inventory levels while meeting consumer demand effectively [85][87]

Core Insights - Skechers reported Q2 2025 GAAP revenue of $2.44 billion, a 13.1% increase year-over-year, exceeding analyst estimates [1][5] - Non-GAAP revenue reached $2,410 million, surpassing the estimate of $2,351.54 million, with non-GAAP earnings per share matching expectations at $0.83 [1][2] - The company experienced declining margins, with gross margin falling to 53.3% from 54.9% and operating margin decreasing to 7.1% from 9.6% year-over-year [1][7] Financial Performance - Net earnings attributable to Skechers U.S.A. increased by 21.5% to $170.5 million compared to $140.3 million in Q2 2024 [2] - International sales rose by 22.0%, with the Europe, Middle East, and Africa region showing a notable 48.5% increase to $731.5 million [5] - Domestic sales remained stable, with wholesale down 7.5% to $413.3 million, while Direct-to-Consumer sales rose 7.6% to $448.8 million [6] Business Overview - Skechers designs and markets a variety of footwear and apparel, focusing on comfort and innovation, with proprietary technologies like Hands Free Slip-ins and Arch Fit insoles [3][4] - The company has been expanding its international presence and direct-to-consumer channels, emphasizing comfort-based technologies and brand marketing [4] Operational Developments - Operating expenses increased by 15.4%, leading to operating costs rising to 46.2% of sales, driven by higher brand marketing and distribution expansion costs [8] - The impact of foreign currency movements positively affected reported results, contributing $33.9 million to sales and $0.30 to diluted earnings per share [8] Future Outlook - Management did not provide specific financial guidance due to uncertainties in global trade dynamics and consumer behavior [10] - Key issues for investors include managing margin pressure, the impact of new tariffs, and the ongoing sales slump in China [11]

Core Insights - Under Armour, Inc. reported first-quarter fiscal 2026 results with revenues exceeding estimates but earnings missing expectations, indicating a mixed performance [1][3] - The company emphasized brand momentum and strategic focus on premium products and pricing innovation despite a challenging environment [2] Financial Performance - Adjusted earnings were 2 cents per share, missing the Zacks Consensus Estimate of 3 cents, but increased from 1 cent per share in the prior year [3][10] - Net revenues were $1,134.1 million, beating the consensus estimate of $1,132 million but down 4.2% year over year [3][10] - Wholesale revenues fell 4.6% to $649.1 million, while direct-to-consumer revenues declined 3.5% to $463.5 million [4] Revenue Breakdown - Apparel revenues decreased 1.5% to $746.6 million, exceeding the estimate of $729.4 million, while footwear revenues dropped 14.3% to $265.9 million, missing the estimate of $286.4 million [5] - Revenues from North America declined 5.5% to $670.3 million, missing the estimate of $675.6 million, while international revenues decreased 1.4% to $466.6 million [6] Margin Analysis - Gross profit was $546.5 million, down 2.9% year over year, but gross margin expanded 70 basis points to 48.2% due to favorable foreign exchange rates and improved pricing [8] - Adjusted selling, general and administrative expenses decreased 5.9% to $522.1 million, excluding transformation costs [9] Future Outlook - For Q2 fiscal 2026, revenues are expected to decline 6-7% compared to the same period in fiscal 2025, with varying performance across regions [15] - Gross margin is projected to contract 340-360 basis points due to supply-chain headwinds and unfavorable channel mix [16] - Adjusted operating income is estimated between $30 million and $40 million, with a forecasted loss per share of 7 to 8 cents [18]

Core Insights - NIKE Inc. is intensifying its focus on e-commerce amidst a challenging retail environment, with digital transformation efforts showing early signs of success [1][8] - The company is implementing strategies such as storytelling integration, partnerships with platforms like Amazon, and enhancing wholesale collaborations to expand consumer reach [1][8] - Despite digital gains, NIKE faces ongoing retail challenges, including declining wholesale revenues and high inventories in certain regions [2][8] E-commerce Strategy - NIKE Direct is evolving into a premium destination linked to sports moments and product launches, aiming for full-price sales even at the cost of lower short-term traffic [1][3] - The brand is committed to leveraging its sport-led identity to stimulate consumer demand both online and in physical stores [3] Competitive Landscape - Rivals lululemon and adidas are also enhancing their e-commerce strategies to capture consumer spending in a digital-first marketplace [4] - lululemon's e-commerce contributes over 40% of total revenues, supported by strong product innovation and brand activations [5] - adidas is experiencing growth in its e-commerce segment through exclusive product drops and targeted marketing, helping to mitigate the impact of weaker wholesale and store traffic [6] Financial Performance - NIKE's shares have increased by 27.5% over the past three months, outperforming the industry growth of 23.4% [7] - The Zacks Consensus Estimate indicates a projected earnings decline of 21.8% for fiscal 2026, followed by a growth of 53.7% for fiscal 2027 [9] - NIKE's forward price-to-earnings ratio stands at 40.05X, significantly above the industry's 30.08X [12]