China Xiniya Fashion Limited a leading provider of men's business casual apparel in China, reported financial results for the first quarter of 2013.
First Quarter 2013 Highlights
-Revenue in the first quarter of 2013 increased by 4.2% to RMB221.2 million, as compared to RMB212.3 million in the first quarter of 2012, which is within the prior guidance of 1%-5%.
- Gross margin was 30.7% in the first quarter of 2013 as compared to 34.1% in the first quarter of 2012.
- Profit before taxation in the first quarter of 2013 declined by 19.9% to RMB46.4 million as compared to RMB57.9 million in the first quarter of 2012.
- Net profit in the first quarter of 2013 declined by 23.1% to RMB33.2 million as compared to RMB43.2 million in the first quarter of 2012.
- Earnings per ADS were $0.09 in the first quarter of 2013 as compared to $0.12 per ADS in the first quarter of 2012, which is within the prior guidance of $0.05-$0.09 per ADS.
- Xiniya's network of authorized retailers had a net reduction of 34 retail outlets in the first quarter of 2013, consisting of 37 new retail outlets opened and 71 retail outlets closed. The total number of authorized retail outlets was 1,676 as of March 31, 2013.
Recent developments
-The Company successfully held its Fall and Winter Collections Sales Fair on April 15, 2013, in Xiamen City, Fujian Province.
The Company's distributors and authorized retailers in attendance placed their purchase orders for Xiniya's latest fall/winter collections. Xiniya exhibited over 2,000 new products during the week-long sales fair including apparel, shoes, bags and accessories for distributors and authorized retailers to select from based on each store's location, climate and local consumer taste.
Deliveries will take place during the second half of 2013. The distributors will then either deliver these products to authorized retailers or display them in their own retail outlets. The results of the sales fair will be announced soon.
- The Company successfully renewed the celebrity endorsement contact with leading cantopop star Jacky Cheung for an additional ten-month period commencing on March 1, 2013 through December 31, 2013. Mr. Cheung has represented the Xiniya brand since October 2007.
- In order to improve sales performance in Inner Mongolia and Hebei provinces, the Company is going to reorganize its distribution system in these two provinces and consolidate their management under the distributor in Beijing.
The Company and its existing distributors in Inner Mongolia and Hebei provinces mutually agreed to cease their business relationship immediately after these distributors fulfill their obligation to distribute the 2013 spring and summer collections to the authorized retailers.
The Company has put in place transitional arrangements for the distributor in Beijing to take over the distribution of Xiniya brandedproducts in Inner Mongolia and Hebei provinces. Its distributor in Beijing will be responsible for the delivery of the 2013 fall and winter collections and beyond. As of March 31, 2013, the Company had 42 and 41 authorized retail outlets in Inner Mongolia and Hebei provinces, respectively.
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