Peacebird (603877): Channel adjustment drags down revenue performance and gross margin improvement continues

Event description Peacebird achieved revenue in the first quarter of 201916.

5.北京养生会所 9 billion, down 4.

46%, net profit attributable to mother 0.

8.7 billion, down 34.

90%, net of non-attributed net profit is 0.

3.1 billion, down 65.

37%.

Incident review Rakucho improved and continued, the decline of PB women’s clothing narrowed, and the high base dragged down the performance of PB men’s clothing / Mini Peace.

In terms of brand, mature brand PB women’s clothing, PB men’s clothing revenue for two years.

0%, -11.

6%, the decline in PB women’s clothing was narrowed by 13 compared with 18Q4.

4pct, PB men’s clothing is affected by the high base of 18Q1 (+21 multiple times.

3%), a decline; among emerging brands, Rakumachi, Mini Peace, revenue +12 twice.

1%, -3.

3%, the joint venture transferred to the adjustment of the franchise mode continued to grow under the development of Mini Peace, Mini Peace positioning trend, children’s clothing development trend is better, the growth rate is mainly due to the 18Q1 high base drag (+51 each time).

0%).

The channel adjustment dragged down the revenue performance, and the improvement of consumption is expected to focus on the improvement of new store performance.

Affected by the intensive adjustment of inefficient stores, the company’s mature stores accounted for a relatively low proportion, with 1,111 / 768 stores opened / closed in 18 years, and 120/206 opened / closed stores in 19Q1.

The inefficient stores in the early period have cleared up significantly. Consolidated consumption tends to make limited contributions to new stores, and Q1’s income side performance is under pressure.

The company’s channel structure has undergone four quarters of adjustment since 18Q2, and the current inefficient store adjustment is nearing completion.

By the end of the year, the company’s newly opened stores accounted for more than 50% within 2 years. Although the short-term retail performance was under pressure, the improvement of new store efficiency under the background of steady retail growth was worth looking forward to.

Gross margin improvement continued, and operating leverage dragged down profit performance.

In Q1, the gross profit margin of apparel operation business increased by 2.

3 points to 57.

6%, including PB women’s clothing / PB men’s clothing for two years +5.

6pct / -3.

1pct, emerging brand Rakucho / Mini Peace +5.

4pct / + 6.

6pct; From the perspective of channels, the gross profit of direct sales / joining franchise is half a year-0.

3pct / + 3.

6 points.

As of Q1, the company’s direct-operated store revenue ratio increased by 1.

9pct to 53.

1%, the proportion of online income increased by 1.

2pct to 27.

7%.

Under the background of revenue budget, the proportion of direct business increased, and the cost fluctuation of the enlarged report increased, and the expense ratio increased by 4 during 19Q1.

9pct, affecting profit performance. Inventories decreased from the beginning of the period, and the increase in payment of employees’ salaries and taxes has dragged down operating cash flow.

The inventory at the end of the period decreased by 2 from the beginning of the period.

500 million to 15.

900 million, a decrease of slightly lower than the same period last year.

1 billion; Considering the improvement of the applicable efficiency of the TOC and the centralized processing of the previous out-of-season inventory, the inventory structure is expected to be better.

At the same time, affected by the increase in salaries and taxes, Q1’s net operating cash flow was -2.

700 million.

Pacific Bird is a high-quality local fast-fashion brand company with overlapping forward-looking perspectives on emerging channels and the layout of the brand’s matrix; recent channel 杭州夜网adjustments have dragged down revenue-side performance and focused on the trend of new store efficiency.

With reference to the company’s business plan, it plans to realize revenue of 8.8 billion yuan in 19 years, and net profit of 700 million yuan, corresponding to a growth rate of 14% and 22%.

The completion of our plan is optimistic. It is expected that EPS will be 1 in 19 years and 20 years.

46 yuan, 1.

74 yuan, the corresponding PE is 12.

68 times, 10.

60 times, maintain “Buy” rating.

Risk reminders: 1. The risk of major channel adjustments; 2. The risk of product style adjustments not matching consumer preferences.