Belle Update: Same Store Stomping Continues

belle logo

As detailed here, major China retailer Belle International, 1880 hk has been facing double-digit same store sales declines in its footwear division.  Historically, this division has had the most numbers in terms of outlets and profits. Meanwhile, its primarily licensed sports apparel business has helped take up the slack in revenues but not in profits.

The company just updated its same store sales for the first quarter ending May, 2016 and the bleeding continues.

belle q same store sales

Although footwear slightly improved from the last quarter, sportswear is sliding further.

belle same store spread

Despite the drop, Belle has maintained its high outlet count, now at 20,876 on the mainland. (Hong Kong Macao are excluded from quarterly updates – last reported at 144 on 5/24/2016, down from 186 in 2009). Year on year outlets have increased by 2.4% while the mix has favored an increase in apparel by 11.8% and a drop in footwear by 2%.

Belle store numbers upd.PNG

At its last annual ending Feb, 2016, as noted previously, Belle had a drop in earnings of 38.4% despite a 2% increase in revenues thanks to same store sales declines, particularly in footwear, and the lower margins of sportswear apparel.

Based on this current update, the first quarter performance should show another decline in gross margins, net earnings and eps, with its current p/e too high.

Belle stock

Disclosure: Data from HK filings except as indicated. I have no positions in the stock mentioned, and no plans to initiate any positions within the next 72 hours. I am not receiving any compensation for this article.


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