FILA Holdings Inc.

- Year-on-year earnings rise 15%, buoyed by strong performance of Acushnet as FILA Holdings continues to enhance brand value via recruitment of key talent and tennis business expansion in 2H

FILA Holdings Corp. recorded its greatest quarterly performance in the second quarter following the first quarter of this year. FILA Holdings' consolidated sales in Q2 reached 1.17 trillion, up 15% from the same period last year. Operating profit fell 12.3% year-on-year to 152.39 billion won due to unstable market conditions both at the domestic and global levels such as supply chain issues and worsening consumer sentiment caused by inflation.

By business sector, Acushnet recorded sales of 828.98 billion won and operating profit of 112.47 billion won amid strong demand in the revitalized golf market. FILA recorded sales of 342.93 billion won and operating profit of 39.92 billion won as changes were made to Korea- and U.S.-based businesses in accordance with the company’s mid-to-long-term strategy.

Acushnet Holdings Corp., a controlling subsidiary of FILA Holdings, recorded another earnings surprise following Q1. Sales shot up 18.3% to 828.98 billion won from the same period last year. Its earnings growth was led by its solid customer base and demand despite worsening global economic conditions such as the Ukrainian war and supply chain disruptions. Focusing on the U.S. market, which generated the largest sales growth, Titleist golf clubs and newly launched Footjoy golf shoes drove overall performance with high sales rates worldwide. Acushnet's steady growth is drawing attention backed by continuous innovation across all categories of the business and strong demand for golf in both the domestic and global markets.

FILA recorded sales of 342.93 billion won, up 7.6% from the same period last year. As FILA's mid- to long-term strategy is in full swing, it was inevitable to adjust the increase in sales of direct business. In addition, external factors such as the Shanghai lockdown, supply chain issues, and worsening consumer sentiment due to inflation also affected earnings performance. Nevertheless, both FILA royalty income and design service fee income rose due to its recovery of sales in the regions where the business partners are operating FILA brand business, offsetting the decline in sales in Korea and the U.S., which, as previously mentioned, were affected by sales channel adjustment aligned with the five-year strategy. FILA plans to continue to improve its fundamentals in all directions to enhance brand value over the long run.

Moreover, FILA is reorganizing at both the domestic and global level judging that overall organizational improvement at the group level precede re-establishing its brand identity as a “premium sports lifestyle brand.”

First of all, the design team has recently been reorganized and is again fully operational. It is now led by Luca Bertolino, a global strategic marketing director who joined FILA earlier this year, and includes experts with decades of experience in leading global sports brands such as Nike, Adidas, and Puma. In addition to the design team, FILA plans to recruit new experts for each major position like in its innovation team, and expects to finalize employing key global personnel who will accelerate the process of implementing its mid-to-long-term strategy by September. Based on its best-fit recruitment plan, it plans to strengthen its competitiveness by developing steady seller products at the global level that can showcase the brand's identity. Regarding the Korean market, FILA plans to strengthen its organizational capabilities centered on Ji-heon Kim, CEO of FILA Korea, who was newly appointed in May, and be committed to the company’s sustainable growth for successful implementation of its mid-to-long-term strategy.

“Despite the intensifying uncertainties at both the domestic and global levels, such as with the Shanghai lockdown, the prolonged war between Russia and Ukraine, and supply chain issues, we managed to record results that exceeded market expectations due to solid demand for Acushnet and the smooth implementation of the global mid-to-long-term strategy in the FILA sector,” said an official from FILA Holdings. The official added, “In the second half of the year, we plan to show the changes to our brand in a more practical way under the five-year mid-to-long-term strategy.”