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Behind The Turn Of The United States' Clothing Is The Return Of The King Or A Flash In The Pan.

2019/4/16 21:05:00 10340

American Apparel

Founded in 1995, 002269.SZ is a leading domestic casual wear company, which was listed in Shenzhen Stock Exchange in 2008.

The Meters/bonwe and ME&CITY brands of Smith Barney clothing once had very high national recognition. From 2012 to 2015, the company's main clothing design, production and sales business was impacted by foreign fast fading clothing enterprises such as UNIQLO and ZARA, and the market share and sales situation deteriorated.

Coupled with the failure of business upgrading and pformation, the company entered a low ebb tide. Net profit began to decline in 2012, and even lost 432 million yuan in 2015.

After 2015, the company improved its original "direct sale + franchising + e-commerce" mode, and set up several local subsidiaries to manage franchisees and direct sales counters, enhance the impact on franchisees, improve the stock redundancy in traditional franchising mode, and update the fashion styles in a timely fashion.

And through brand, product and channel upgrading, improve the cognition of younger generation of consumers, and gradually get out of the trough.

Fiscal year 2018 and fiscal year 2019 are the key window to test the short term results of the pformation of American Apparel business.

In 2018, the United States apparel business income of 7 billion 677 million yuan, an increase of 18.62% over the same period, attributable to shareholders of the parent company's net profit of 40 million 361 thousand and 600 yuan, an increase of 113.24% over the same period, to achieve profitability.

Once the United States dress, that does not take the unusual road of Metersbonwe, this time can be arrogant return?

I. main business situation

From the perspective of revenue structure, the total revenue of men's wear and women's wear products in 2018 accounted for 91.36% of total revenue. It was the main source of profit for the company, 7.88% of other products and 0.76% of other businesses.

From the perspective of revenue growth, in 2018, in the company's main clothing sales business, Menswear products revenue was 4 billion 212 million yuan, an increase of 10.95% over the same period, and the sales of women's clothing products was 2 billion 802 million yuan, an increase of 31.58% compared with the same period last year. The revenue of other products was 605 million yuan, an increase of 25.26% over the same period last year.

From the gross margin of main products sales, the gross margin of men's clothing sales in 2018 was 45.11%, down 3.05 percentage points from the same period, and the gross margin of women's clothing sales was 45.12%, down 2.13 percentage points over the same period.

The average selling price of the main products of the company has slipped and the average selling cost of the unit has increased, which is the main reason for the decline in gross profit margin.

Two, the main business is still losing money.

In 2018, the United States made a pre tax profit of 48 million 780 thousand and 900 yuan and realized a profit deficit of 299 million yuan.

However, according to the composition of profits, the investment income of this year is 48 million 328 thousand yuan, which is mainly about the equity investment income of Mei Bang clothing to Huarui bank, and the other income is 33 million 106 thousand and 400 yuan, which is the government subsidy that is included in the profit and loss of the year. The total investment income and government subsidy are 81 million 434 thousand and 400 yuan, which has far exceeded the pre tax profit of 48 million 780 thousand and 900 yuan.

That is to say, the main business of the company is still not profitable.

Three, direct profitability decline, cost control capabilities have been enhanced

From the company's comprehensive sales gross margin index, in 2018, the gross profit margin of the company decreased, from 47.45% in 2017 to 44.66% in this year.

According to the sales volume, operating income and operating cost of the wholesale and retail trade disclosed in the annual report of the company, the average selling price of the wholesale and retail industry in 2018 was about 92.74 yuan / piece, which was 0.33% lower than that of last year's 93.05 yuan / piece, while the average selling cost of the unit was about 51.17 yuan / piece, an increase of 4.98% compared with the 48.74 yuan / piece in 2017.

Due to a slight decrease in the average selling unit price in 2018, the corresponding unit average selling cost showed a certain uplift. The gross profit margin of wholesale and retail sales dropped from 47.62% in 2017 to 44.83% in 2018.

In 2018, wholesale and retail revenue accounted for 99.24% of the company's revenue, resulting in a decline in the gross margin of comprehensive sales.

According to the cost rate of the company, in 2018, the period cost rate of American Apparel decreased from 45.15% in 2017 to 38.33%.

According to the detailed items, in 2018, the sales cost was 2 billion 711 million yuan, up 7.97% compared with the same period last year. The management cost was 152 million yuan, a decrease of 18.65% compared with the same period last year, and the financial cost was 81 million yuan, up 23.97% over the same period last year.

Sales expenses are the main components of the company's expenses during the period. The company's revenue growth in 2018 is faster than the increase in sales costs, resulting in a decrease in the cost of the period.

In recent years, the United States has made a layout marketing network to expand product influence through upgrading store image and developing new channels. It needs to continuously invest in the sales expenses of its subordinate stores and franchised stores. In 2018, the total sales cost accounted for 35.31% of total business revenue, which was 4.56 percentage points lower than that in 2017.

Four, inventory turnover efficiency improved, credit sales increased.

From the days of inventory turnover, the inventory turnover days of Smith Barney clothing were reduced from 233 days in 2017 to 208 days in 2018, and the turnover days were reduced by about 25 days, and the turnover efficiency was improved.

However, the absolute amount of stock at present is still very large.

By the end of 2018, the book value of stock was 2 billion 349 million yuan, accounting for 32.58% of total assets.

It is worth noting that the company's inventory depreciation reserve in 2018 has been reduced.

Inventory loss in 2018 was 230 million yuan, down by 139 million yuan, which should be related to optimizing supply chain and improving inventory backlog.

In terms of accounts receivable turnover efficiency, the company receivable turnover days increased from 23 days in 2017 to 39 days in 2018.

Because the rate of accounts receivable is higher than the growth of operating income, the turnover efficiency of accounts receivable is reduced to a certain extent.

From the absolute amount of receivables, the book value of receivables and accounts receivable in 2018 was 1 billion 217 million yuan, an increase of 177.33% over the same period last year, and the proportion of total assets increased by 10.26 percentage points.

According to the 2018 annual report, the growth of accounts receivable is mainly due to the increase in credit sales for customers.

Five. Net cash flow from operating activities is negative.

The change of cash flow in 2018 is the highlight of the company's 2018 earnings report.

In 2018, the net cash flow from operating activities has been shifted from negative to positive, mainly due to the fact that the upstream suppliers have more money.

By comparing the net profit of the company, we can find that the cash flow from operating activities is more secure to net profit.

As the company's profit in 2018 changed from deficit to surplus, the net cash flow from operation also changed from net outflow to net inflow. In 2018, the net cash interest rate of the company reached 15.41 times.

Of course, the net sales rate of the company is relatively low, and the absolute amount of net profit is not large, which is also a major reason for this index.

In addition, in 2018, the company's long-term amortization expenses increased by 6.65% compared to the same period last year, and the amortization amount reached 182 million yuan in the year. The balance of long-term deferred expenses as at the end of 2018 still had 282 million yuan.

Due to the long-term amortization cost, the company will deduct a substantial non cash expenditure when calculating net profit.

By the end of 2018, the largest increase in the long term prepaid expenses was the improvement in the operation of fixed assets, which rose from 126 million yuan at the beginning of the year to 190 million yuan.

This expenditure is mainly for direct shop decoration and operation improvement.

As the main selling channel of American Apparel in the first tier cities, direct shops need continuous improvement. The long term prepaid expenses will have a greater impact on future net profit and operating cash flow.

Six, asset liability ratio rises, short-term debt repayment pressure eased.

On the whole, the asset liability ratio of Smith Barney apparel is on the rise.

In 2018, the company's assets and liabilities ratio increased to 60.08%, mainly due to increased suppliers' payment.

From the perspective of debt structure, the liabilities of Smith Barney clothing are all current liabilities.

By the end of 2018, bills payable and accounts payable amounted to 2 billion 341 million yuan, up 55.03% from the same period last year.

The increase in suppliers' payments indicates that the company's control over upstream suppliers is increasing, which is the main reason for the increase in asset liability ratio in 2018.

In addition, in 2018, the total annual purchases of the top five suppliers amounted to about 601 million yuan, accounting for 13.46% of the total annual procurement.

The company does not rely heavily on a single supplier, which should be a strong reason why the company has strong control over upstream suppliers.

In terms of interest bearing liabilities, by the end of 2018, the short term borrowing of Smith bond was 1 billion 80 million yuan, down 7.85% from the same period last year.

Compared with currency funds, by the end of 2018, the currency of US bond clothing currency was 382 million yuan, which is quite different from that of short-term loans. There may be some short-term debt repayment pressure.

Except for short-term loans, the company did not have other interest bearing liabilities as at the end of 2018.

However, according to the announcement on the related pactions of controlling shareholders' financial support announced in April 9, 2019 by American state clothing, Shanghai Huafu investment (Mei Bang apparel shareholders) will provide financial assistance to the company for no more than 500 million yuan, with a term of one year, and the lending interest rate will carry out the benchmark lending rate of the PBC for the same period, providing financial support for the further development of Smith Barney clothing.

In addition, according to the stock plan disclosed by the company in February 1, 2019, the company intends to raise 1 billion 500 million yuan for future enterprise development, and about 1 billion 190 million of the 1 billion 500 million yuan will be used to upgrade the enterprise's brand, that is, the pformation of the product supply chain, and about 310 million will be used to repay the loan.

In view of this, the company's short-term liabilities are expected to improve in the future, and the approval of the SFC is still required for the non-public offering of shares.

Conclusion

Although Metersbonwe turned losses into profits in 2018, its main business is still in a state of loss. Under the background of fierce competition in the apparel industry, the prospect of the United States is still not optimistic.

Author: Zhang steamed bread

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