HONG KONG SAR -
Media OutReach Newswire - 29 November 2024 -
HONMA Golf Limited ("HONMA"; together with its subsidiaries, the "Group"; HKEX stock code: 6858), one of the most prestigious golf brands worldwide, announces its consolidated interim results for the six months ended 30 September 2024 (the "Period").
Financial Highlights- Revenue decreased by 25.6% to JPY9,814.5 million (equivalent to USD64.8 million), due to ongoing and intensified market competition, economic slowdown, and distribution adjustment.
- Direct-to-Consumer channel grew by 6.5%, led by Japan and China whose DTC revenue rose by 5.4% and 10.0%, respectively.
- Successful new product launch of BERES09; BERES golf clubs' performance with 18.4% revenue growth in Japan and 49.4% growth in Southeast Asia.
- Revenue from apparels increased by 6.1%, despite the weak consumer sentiment in China and a reduction in total number of stores.
- Gross profit margin improved by 0.9 percentage points to 53.0%.
- Net operation profit (non-IFRS) amounted to JPY 213.50 million.
- Net operating cash flow remained positive and stood at JPY4,024.4 million (equivalent to USD26.6 million) for the six months ended 30 September 2024, recording an eight-year CAGR of 8.4%.
Major Achievements For the six months ended 30 September 2024, HONMA steadfastly implemented its business strategies while carefully protecting its financial strength and cash flow. Since early 2023, the global golf industry has seen continued, downward adjustments in both the number of rounds played and purchase interest of golfers at different stages and across different markets. These developments echoed management's decision to strengthen and streamline its product offering around two consumer segments, namely super-premium and premium-performance consumer segments. Despite market headwinds, HONMA's direct-to-consumer channels and core product categories demonstrated resilience during the Period.
Focusing on Club Products that Best Represent Japanese Craftsmanship and World Standard Innovative Technology in Pursuit of Players in Super-Premium and Premium-Performance Segments HONMA remains committed to applying cutting-edge technologies and artisan-style Japanese craftsmanship to the design, development, and manufacturing of a comprehensive range of exquisitely crafted and performance-driven golf clubs. HONMA applied several of its revolutionary proprietary technologies to the design and development of its latest BERES and TOUR WORLD products, designed for affluent and avid golfers. Following the launch of BERES 09 in early 2024, the Group gained additional penetration into the super-premium consumer segment, especially in Asia. Revenue from BERES golf clubs rose by 18.4% in Japan and by 49.4% in Southeast Asia. During the same period, Be ZEAL3, a product designed for golfers in the premium performance segment rose by 27 times. In addition, following the launch of several collections of SAKATA Lab putters in early 2024, sales of putters increased by 36.8% for the half year ended 30 September, reconfirming HONMA's strong brand equity and its ability to cater to both affluent and avid golfers.
Accelerating Apparel Growth to Provide a Complete Golf Lifestyle Experience for Customers Revenue from apparels increased by 6.1% YOY to JPY1,340.6million for the half year ended 30 September 2024. The profit margin of apparels increased by 29.1 percentage points to 57.3%. Despite weak consumer sentiment and a reduction in the total number of stores in mainland China, apparels sales continued its growth trajectory, achieving 15.9% YOY growth.
Improving Profitable Growth by Focusing on DTC Channels, Contributing 56.1% of Total Revenue Self-operated stores continued to exhibit strong growth momentum, posting a steady increase of 6.5% for the six months ended 30 September 2024. This growth was driven by continued retail operational improvements in Japan and China (including Hong Kong and Macau), where retail sales grew by 5.4% and 10.0%, respectively. Revenue from third-party retailers and wholesalers decreased by 46.3% during the same period, primarily due to a decline in wholesale revenue from Japan, Korea, and China (including Hong Kong and Macau) as a result of economic slowdown and channel reshuffling in Korea. Revenue from e-commerce grew by 8.1%, with Japan increasing by 18.9% and mainland China by 5.8%. The rapid expansion of digital communications led to improvements in organic traffic, conversion rates, and other digital brand engagement metrics such as bounce rate and time on site, amongst others.
Strong Recovery in Europe and North America Following Channel Optimisation Following past years' distribution network optimisation, sales from Europe and North America rose by 92.4% and 23.5% from the six months ended 30 September 2023, respectively, while expanding their profitability. North America and Europe account for more than 50% of the global golf market....
