【Corporate Profit Warning】RIDGE OUTDOOR expects mid-term profit to drop by up to 44%, with revenue declining and sales expenses increasing
RIDGE OUTDOOR issued a profit warning, expecting a mid-term net profit of approximately RMB 22.5 million to 23.3 million for the six months ending June 30, representing a year-on-year decline of 42.2% to 44.2%. This is mainly due to a reduction in revenue caused by extended order cycles from OEM customers, foreign exchange losses, and a rise in the prices of raw materials such as aluminum by over 20%, which increased costs. Although the gross profit margin remained basically flat due to growth in brand business, selling and administrative expenses increased. The company will announce its official results by the end of August
According to a report from the Economic Information Agency on the 14th, RIDGE OUTDOOR (02720) announced that it expects a mid-term net profit of approximately RMB 22.5 million to RMB 23.3 million for the six months ending June 30, representing a decline of about 42.2% to 44.2%.
The group indicated that the expected decline in net profit during the period is due to the extended order cycle from original equipment manufacturer (OEM) customers, leading to a decrease in total revenue for the first half of the year; a foreign exchange loss recorded in the first half; and a rise in core bulk raw material prices, such as aluminum, which increased by over 20%, directly pushing up the unit production costs of products and further compressing the gross profit margin. However, thanks to the growth of original brand manufacturer (OBM) business and changes in product structure, the gross profit margin remained basically flat compared to the same period last year; coupled with continuous investment in promoting OEM business and building OBM competitiveness, sales and management expenses have further increased.
The group will announce its results by the end of August. (wh)
