On February 1, 2024, Amazon Sports, which went public on the US stock market, received its best quarterly report. On November 19th Eastern Time, Amalfin Sports released its third quarter report, showing a year-on-year revenue growth of 17.4% in the third quarter of this year; Net profit reached 56.2 million US dollars, turning losses into profits year-on-year. The excellent performance in the third quarter directly led the company to achieve a year-on-year turnaround in losses in the first three quarters. Among them, the company's Greater China region still demonstrated strong resilience, with a 56% year-on-year increase in revenue in the third quarter.
YaMaFen Sports' subsidiary, Archaeopteryx, has always been known as the "outdoor top stream" and "middle-class standard" in China. YaMaFen Sports also revealed at the financial report conference that Archaeopteryx is currently the fastest-growing and largest brand under the company. However, in terms of supporting the second curve, Amalfin Sports seems to have accelerated its pace, reflected at the store level. The company revealed that Salomon plans to open 404 stores worldwide by the end of the year, while Archaeopteryx plans to add only 30 stores by 2024.
The rapidly growing Greater China region
The third quarter of 2024's Amalfin Sports surprised the market. During the reporting period, its revenue was $1.354 billion, a year-on-year increase of 17.4%; The company achieved a net profit of 56.2 million US dollars, compared to a loss of 35.9 million US dollars in the same period last year. Due to strong growth in the third quarter, the company announced at the Q3 financial report that it has raised its full year revenue growth forecast to 16% to 17%.
Benefiting from the strong performance in the third quarter, Amalfin Sports achieved a revenue of $3.548 billion in the first three quarters of 2024, a year-on-year increase of 15.5%; Achieved a net profit of 61.3 million US dollars, compared to a loss of 114 million US dollars in the same period last year.
As a global sports and outdoor brand group, Amalfin Sports owns high-end outdoor brands such as Arc'teryx, French mountain outdoor brand Salomon, and American tennis equipment brand Wilson. Its main sales regions include the Americas, Greater China, EMEA consisting of Europe, the Middle East, and Africa, as well as the Asia Pacific region.
Among them, the development of Amafin Sports Greater China is still rapid. The Greater China region of the company includes Chinese Mainland, Hong Kong, Macao and Taiwan. In the third quarter of 2024, its revenue in Greater China was $313 million, a year-on-year increase of 56%, while the company's revenue growth rates in EMEA, Americas, and Asia Pacific were 3.8%, 7.2%, and 47.3%, respectively. In the first three quarters of 2024, the revenue of Amazon Sports Greater China was 914 million US dollars, a year-on-year increase of 53.6%.
Regarding the strong growth in the Greater China region, a reporter from Huaxia Times learned from information provided by staff members of YaMaFen Sports that YaMaFen Sports CEO Zheng Jie believes that "the brand positioning is mainly based on the high-end sports and outdoor markets, which are the most dynamic and growth potential consumer groups in China. This field not only attracts young consumers, but also includes women and luxury consumers, and is a rapidly growing blue ocean. In addition, China's consumer market is undergoing a process of survival of the fittest. In this environment, although our brand is relatively 'niche', it has gained wide recognition from consumers with its excellent professionalism. Most importantly, our team's profound professional knowledge and scalable unique operating platform provide a platform for... The entire brand has been endowed with a significant competitive advantage
Cheng Weixiong, an independent analyst in the fashion industry and founder of Shanghai Liangqi Brand Management Co., Ltd., analyzed to our reporter that "the high growth of Yamafeng Sports in the Chinese market is mainly due to the fact that Archaeopteryx is at ease in the Chinese market. Years of accumulation have made Archaeopteryx very Chinese in terms of marketing, products, and channels. With the help of the trend in the Chinese outdoor market, it has achieved rapid growth
Power second curve
At present, Amalfin Sports mainly divides its products into three categories: technical clothing, outdoor equipment, and ball and racket sports. In the first three quarters of 2024, the revenue of technical clothing, including the brands of Archaeopteryx and Pike Peak, accounted for 41%, making it the largest revenue segment under Amalfin Sports. In the first three quarters of this year, the revenue of this category was 1.449 billion US dollars, a year-on-year increase of 37.4%, far ahead of the other two categories in terms of growth rate.
At the financial report meeting, Amalfin Sports also stated that Archaeopteryx is currently the fastest-growing and largest brand under the company. In the third quarter of this year, Archaeopteryx achieved healthy growth in all regions, channels, and categories; In terms of stores, Archaeopteryx added 9 brand exclusive stores globally in the third quarter, bringing the total number of its own brand exclusive stores to 134. It plans to add a net of 30 Archaeopteryx stores in 2024, the year with the largest store growth in the brand's history.
Compared to the restrained development of the Archaeopteryx, Salomon has become the next focus of development for Amalfin Sports. In the first three quarters of 2024, Salomon's outdoor products revenue was 1.241 billion US dollars, a year-on-year increase of 8%, accounting for 35% of the revenue. At the financial report meeting, Amalfin Sports revealed that Salomon's footwear and apparel business currently accounts for about two-thirds of the outdoor products revenue. In the long run, it is expected that Salomon's footwear and apparel business will achieve double-digit growth every year; Worldwide, Salomon plans to open 404 stores, including both direct and franchise stores, by the end of the year, doubling the number compared to the same period last year.
In Greater China, Salomon will continue to expand its store network. According to the financial report, Salomon added a net of 29 stores in the third quarter, including its own and partner stores, bringing the total number of stores in Greater China to 165. It is expected that by the end of 2024, the number of Salomon stores in China will reach about 200, and the number of stores in first and second tier cities in China is expected to reach hundreds in the future. Yamafen Sports also revealed at the earnings conference that Salomon has created a new category in China called "off-road running shoes", which is particularly popular among young consumers.
During this process, the sales and marketing expenses of Amalfin Sports continued to increase. In the first three quarters of this year, the sales and marketing expenses of Yamafon Sports were 1.204 billion US dollars, a year-on-year increase of 23.3%, and the sales expense ratio increased to 33.9%; In 2022 and 2023, the company's sales and marketing expenses increased by 15.1% and 24.7% year-on-year, respectively, with sales expense ratios of 31.2% and 31.6%.
Regarding the vigorous development of Salomon, Cheng Weixiong analyzed to our reporter that "Yamafen Sports regards Salomon as the second curve, mainly because Salomon is more dominated by off-road running shoes. With the increase of off-road running competitions in China, it attracts many middle-class people, and off-road running shoes are becoming increasingly popular in the Chinese market. Yamafen Sports strengthens Salomon to meet this market demand
Off road running shoes have been a popular category in recent years, and in this field, Salomon's competitive pressure is not small. As a high-end sports brand with running as its core, Angpao has grown rapidly in the Chinese market in recent years. After achieving a year-on-year growth rate of over 70% in net sales in the Asia Pacific region, including China, in 2023, the company's net sales in the Asia Pacific region increased by 73.9% in the first three quarters of this year. Angpao stated that this was mainly due to strong growth in the Japanese and Chinese channels.
In addition, local brand Xtep International has gradually invested more resources into the running shoe market in recent years. Not only has it sponsored the 2024 Xiamen Marathon for 16 consecutive years, but it has also launched multiple new products in the first half of this year for its main brand Xtep and the main off-road running and outdoor sports brand McLaren. In the first half of this year, the revenue of professional sports brands under Xtep International, including Malibu, increased by 72.2% year-on-year, which is the driving force behind Xtep International's revenue growth.
On November 21st, our reporter asked the relevant staff of YaMaFen Sports about the focus of resource allocation and channel planning for the Chinese market of Archaeopteryx. The other party stated that it is currently not convenient to reply.